F-1

As filed with the Securities and Exchange Commission on November 15, 2010

Registration No. 333-            

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Youku.com Inc.

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

Cayman Islands	7389	Not Applicable
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

5/F, SinoSteel Plaza

8 Haidian Street

Haidian District

Beijing 100080

The People’s Republic of China

(86-10) 5885-1881

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Law Debenture Corporate Services Inc.

400 Madison Avenue, 4th Floor

New York, New York 10017

(212) 750-6474

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Z. Julie Gao, Esq. Skadden, Arps, Slate, Meagher & Flom LLP c/o 42/F, Edinburgh Tower, The Landmark 15 Queen’s Road Central Hong Kong (852) 3740-4700 Leiming Chen, Esq. Simpson Thacher & Bartlett LLP ICBC Tower, 35/F 3 Garden Road, Central Hong Kong (852) 2514-7600

Approximate date of commencement of proposed sale to the public: as soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Proposed maximum aggregate offering price(2)(3)	Amount of registration fee
Class A Ordinary Shares, par value US$0.00001 per share(1)	US$150,000,000	US$10,695

(1) American depositary shares issuable upon deposit of the Class A ordinary shares registered hereby will be registered under a separate registration statement on Form F-6 (Registration No. 333-            ). Each American depositary share represents              Class A ordinary shares.

(2) Includes              Class A ordinary shares that are issuable upon the exercise of the underwriters’ option to purchase additional shares. Also includes              Class A ordinary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of their distribution or within 40 days after the later of the effective date of this registration statement and the date the shares are first bona fide offered to the public. These Class A ordinary shares are not being registered for the purpose of sales outside the United States.

(3) Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(o) under the Securities Act of 1933.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion. Dated             , 2010.

             American Depositary Shares

Youku.com Inc.

Representing              Class A Ordinary Shares

This is an initial public offering of American depositary shares, or ADSs, each representing              Class A ordinary shares of Youku.com Inc., or Youku.

Youku is offering              ADSs to be sold in the offering. Prior to this offering, there has been no public market for the ADSs or our shares. It is currently estimated that the initial public offering price per ADS will be between US$             and US$            . We will apply to list the ADSs on the New York Stock Exchange, or the NYSE, under the symbol “YOKU.”

See “Risk Factors” on page 16 to read about factors you should consider before buying the ADSs.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

	Per ADS	Total
Initial public offering price	US$	US$
Underwriting discount	US$	US$
Proceeds, before expenses, to Youku	US$	US$

To the extent the underwriters sell more than              ADSs, the underwriters have the option to purchase up to an additional              ADSs from Youku at the initial public offering price less the underwriting discount.

The underwriters expect to deliver the ADSs against payment in U.S. dollars in New York, New York on             , 2010.

Goldman Sachs (Asia) L.L.C.        

	Allen & Company LLC
Piper Jaffray		Pacific Crest Securities

Prospectus dated             , 2010

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TABLE OF CONTENTS

	Page
Summary		1
Conventions Used in this Prospectus		7
Risk Factors		16
Special Note Regarding Forward-Looking Statements		54
Use of Proceeds		56
Dividend Policy		57
Capitalization		58
Dilution		59
Exchange Rate Information		61
Enforceability of Civil Liabilities		62
Corporate Structure		64
Selected Consolidated Financial Data		71
Management’s Discussion and Analysis of Financial Condition and Results of Operations		75
Industry		105
Business		111
Regulation		127
Management		148
Principal Shareholders		157
Related Party Transactions		160
Description of Share Capital		162
Description of American Depositary Shares		171
Shares Eligible for Future Sales		182
Taxation		184
Underwriting		192
Legal Matters		198
Experts		199
Additional Information		200
Index to Consolidated Financial Statements		F-1

No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus or in any free writing prospectus we may authorized to be delivered or made available to you. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the ADSs offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

Neither we nor the underwriters has done anything that would permit this offering or possession or distribution of this prospectus or any filed free writing prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus or any filed free writing prospectus must inform themselves about, and observe any restrictions relating to, the offering of the ADSs and the distribution of this prospectus or any filed free writing prospectus outside of the United States.

Through and including             , 2010 (the 25^th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

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SUMMARY

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in the ADSs, you should carefully read this entire prospectus, including our financial statements and related notes included in this prospectus and the information set forth under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Youku.com Inc.

Overview

We are the leading Internet television company in China. Our Internet television platform enables consumers to search, view and share high-quality video content quickly and easily across multiple devices. We believe our continuous focus on offering a superior user experience has enabled us to become the largest Internet television company in China and elevated our Youku brand, which stands for “what’s best and what’s cool” in Chinese, to be the most recognized online video brand in China according to a 2010 survey conducted by an affiliate of the Chinese Academy of Sciences. According to iResearch, we had approximately 203 million monthly unique visitors from homes and offices in September 2010 and approximately 61 million monthly unique visitors from Internet cafes in August 2010. We had a 40% market share in terms of total user time spent viewing online videos in China during the second quarter of 2010, while our closest competitor accounted for a 23% market share during the same period, according to iResearch. In 2009, we had an implied market share of approximately 14% in terms of online video advertising spend in China, based on iResearch’s estimated data of total online video advertising spend in China.

As a video content aggregator in China, we are well-positioned to benefit from the market growth potential in China’s highly fragmented and regulated content production and distribution markets, where less than half of the professionally produced television serial dramas and movies each year are aired on television or released in theaters. We have built a large and comprehensive online video content library. The majority of the videos on our website are professionally produced content, such as television serial dramas, movies, variety shows, current events reports and music videos, and the remainder is comprised of user-generated content and in-house productions. We license video content typically at fixed rates for a specified term. The average term of licenses varies depending on the type of content, with movies and television serial dramas having an average term of approximately 2.5 years and 2 years, respectively. We generally renew our licenses when they expire. As of September 30, 2010, our video content library contained more than 2,200 movie titles, 1,250 television serial drama titles and over 231,000 hours of other professionally produced content, including 194 variety shows.

Our mission is to become the primary source of video content for the Chinese population across any Internet-enabled device. Leveraging our proprietary video content delivery network, or CDN, comprised of over 5,500 servers, we provide fast streaming and upload speeds. At the same time, our comprehensive content library, coupled with an easy-to-use online interface, facilitates our providing a superior user experience, according to a 2010 survey by China Internet Week, a magazine affiliated with the Chinese Academy of Science. As a result, our Internet television platform attracts a nationwide audience, the majority of which resides in China’s more affluent urban areas.

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We currently derive substantially all of our revenues from online advertising services. Our advertising solutions present brand advertisers with attractive opportunities to combine the visual impact and engagement of traditional television-like multimedia advertisements with the interactivity and precise targeting capabilities of the Internet. We strive to promote a healthy advertising environment on our website to attract mainstream brand advertisers. We believe our differentiated sales proposition has contributed to the rapid increase in the number of international and domestic brand advertisers, which increased from 7 in 2007 to 141 in 2008 and to 303 in 2009, and from 230 in the nine months ended September 30, 2009 to 343 in the nine months ended September 30, 2010.

The desirable demographic characteristics of our large user base as well as our differentiated advertising solutions and environment are key factors driving the fast growth in our online advertising revenues. We believe that wireless and web-based subscription services, which we plan to formally launch in the foreseeable future, will also increasingly contribute to our net revenues over time. We launched Youku.com in December 2006. As is customary in the advertising industry in China, we offer commissions to third-party advertising agencies who purchase our advertising services and recognize revenues net of these commissions. Our net revenues increased from RMB1.8 million in 2007 to RMB33.0 million in 2008 and to RMB153.6 million in 2009, and increased from RMB99.8 million in the nine months ended September 30, 2009 to RMB234.6 million (US$35.1 million) in the nine months ended September 30, 2010.

Due to PRC legal restrictions on foreign ownership and investment in value-added telecommunications services and advertising businesses in China, we operate our business primarily through our consolidated affiliated entities in China. We do not hold equity interests in our consolidated affiliated entities. However, through a series of contractual arrangements with these consolidated affiliated entities and their respective shareholders, we effectively control, and are able to derive substantially all of the economic benefits from, these consolidated affiliated entities.

Our Industry

China’s video media market has developed in a very distinct manner from those in the United States and Western Europe, resulting in a domestic ecosystem highly regulated and fragmented both in terms of production and distribution. This market is undergoing substantial changes partially due to macro trends affecting the global video media market, such as the migration of consumers online, the digitization of both new and existing content, and more convenient access to that content through increasingly faster fixed and mobile broadband connections. The combined effect of these macro trends is that the Internet has emerged as a viable video distribution channel. In China, these changes are magnified by the country’s rapid economic growth, the expansion of the advertising industry, significantly increased consumer spending, and the fragmentation of the legacy production and distribution ecosystems for video content. This has created opportunities for web properties in China with differentiated, desirable video content to aggregate large, nationwide audiences while delivering personalized content whenever users want. With disposable income growing quickly in China, these aggregated audiences have become more attractive to advertisers as well as more capable of paying for content.

China’s Internet television market is early in its development and is evolving rapidly as an increasing number of users search, view and share video content online. For the purposes of this prospectus, Internet television is generally synonymous with online video and refers to consumers’ accessing any type of video content via any Internet-enabled device. The strong consumer reaction to, and the emerging advertiser reception of, Internet television in China represents an increasing convergence of the large and fast-growing Internet market and the large, diverse and highly fragmented video media market.

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According to iResearch, the size of China’s online video market, as measured by total revenues, grew rapidly from RMB0.5 billion (US$78 million) in 2006 to RMB2.8 billion (US$413 million) in 2009, representing a compound annual growth rate, or CAGR, of 74%. China’s online video market has become increasingly concentrated, with the top five players accounting for 83% of the total user time spent watching online videos in China during the second quarter of 2010, according to iResearch.

Our Competitive Strengths

We believe that the following strengths contribute to our success and differentiate us from our competitors:

Ÿ leading Internet television company in China with strong brand recognition;

Ÿ network effects and economies of scale resulting in high barriers to entry;

Ÿ large and comprehensive video content library tailored to Chinese users;

Ÿ substantial investments in infrastructure, know-how and products and services to deliver a superior user experience;

Ÿ differentiated sales proposition attracting mainstream brand advertisers; and

Ÿ seasoned management team with a proven track record.

Our Strategies

Our mission is to become the primary source of video content for the Chinese population across any Internet-enabled device. We intend to achieve our mission by expanding our content library and user base, enhancing our brand and better monetizing our user traffic. More specifically, we plan to implement the following strategies:

Ÿ further improve our user experience;

Ÿ increase the breadth and depth of our video content library;

Ÿ expand our infrastructure and optimize our services across Internet-enabled devices;

Ÿ further enhance our brand recognition; and

Ÿ expand and diversify our revenue sources.

Our Challenges

We expect to face risks and uncertainties related to our business and industry, including those relating to our ability to:

Ÿ capitalize on our investments to change our historical net loss position and achieve and sustain profitability;

Ÿ comply with applicable regulations and government policies;

Ÿ generate sufficient revenues to offset the increase in acquisition costs for professionally produced content;

Ÿ maintain our product development advantages and keep up with technological developments and users’ evolving demands; and

Ÿ protect third-party intellectual property rights.

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In addition, we expect to face risks and uncertainties related to our corporate structure and doing business in China, including:

Ÿ risks associated with our control over our consolidated affiliated entities, which is based upon contractual arrangements rather than equity ownership;

Ÿ uncertainties associated with our compliance with various PRC laws and regulations, including regulations requiring domestic telecommunications services providers own domain names and trademarks used in the provision of such services and have necessary facilities for the approved business operations; and

Ÿ uncertainties associated with our ability to fund our expansion and operations due to PRC currency transfer and conversion restrictions and the restrictions on loans and direct investments by offshore holding companies to PRC entities.

See “Risk Factors” and other information included in this prospectus for a discussion of these and other risks and uncertainties associated with our business and investing in our ADSs.

Corporate History and Structure

On September 20, 2005, our founder, Victor Wing Cheung Koo, incorporated 1Verge Inc. in the Cayman Islands. On June 20, 2008, we changed the company name from 1Verge Inc. to Youku.com Inc. On November 14, 2005, we established our wholly owned subsidiary, 1Verge Internet Technology (Beijing) Co., Ltd., or 1Verge Internet, in Beijing, China. On April 27, 2010, we acquired all of the equity interest in Jet Brilliant Limited, or Jet Brilliant, a Hong Kong company, which wholly owns Beijing Jet Brilliant Advertising Co., Ltd., or Jet Brilliant Beijing, an advertising company established in Beijing, China. Jet Brilliant operates as our intermediary holding company. For descriptions of the tax implications of having Jet Brilliant as our Hong Kong intermediary holding company and the relevant PRC laws and regulations, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Taxation—PRC” and “Regulation—Regulations on Tax—Dividends Withholding Tax.”

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The following chart illustrates our corporate structure as of the date of this prospectus:

(1) 1Verge Information and Jiaheyi are our consolidated affiliated entities established in China and each is 80% owned by Ms. Qiong Qin, the wife of our founder, Mr. Victor Koo, and 20% owned by Mr. Dele Liu, our director, chief financial officer and senior vice president. We effectively control 1Verge Information and Jiaheyi through contractual arrangements. See “Corporate Structure.”

PRC laws and regulations currently limit foreign ownership of companies that provide value-added telecommunications services. To comply with these restrictions, we conduct our online video operations in China primarily through our consolidated affiliated entity, 1Verge Information Technology (Beijing) Co., Ltd., or 1Verge Information. 1Verge Information is our website operator and Internet content provider, and holds the licenses and permits issued by both the telecommunication and broadcast media authorities as well as other ancillary licenses and permits to conduct our online video operations. PRC laws and regulations also restrict foreign ownership of companies that conduct advertising business by requiring a Sino-foreign joint venture’s foreign investor to have previously had two years’ direct advertising operations as its main business outside of China, and a wholly foreign-owned enterprise’s foreign investor to have previously had three years’ direct advertising operations as its main business outside of China. As a Cayman Islands company, we are a foreign legal person under PRC laws and we have not been involved in any advertising business outside of China for the requisite number of years. We conduct our advertising business in China primarily through our consolidated affiliated entities, 1Verge Information and Jiaheyi Advertising (Beijing) Co., Ltd., or Jiaheyi. Jiaheyi is an advertising agency, which plays an immaterial role in our business and contributed less than 1% of our total net revenues in each of 2007, 2008, 2009 and the nine months ended September 30, 2010. We intend to begin the process of liquidating Jiaheyi in 2011. Jet Brilliant is a Hong Kong company which satisfies the requirement of having three years’ direct advertising operations, and therefore was approved by local branch of the State Administration for Industry and Commerce, or the SAIC, to establish Jet Brilliant Beijing on May 19, 2009, a wholly foreign-owned advertisement company. As we acquired Jet Brilliant on April 27, 2010, Jet Brilliant Beijing will conduct

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our advertising agency business in the future. However, we do not expect that the advertising agency business will play an important role in our overall business in the future.

Our wholly owned subsidiary, 1Verge Internet, has entered into a series of contractual arrangements with 1Verge Information, Jiaheyi and their respective shareholders, which enable us to:

Ÿ exercise effective control over the business management and shareholder voting rights of 1Verge Information and Jiaheyi;

Ÿ receive substantially all of the economic benefits of 1Verge Information and Jiaheyi through service and licensing fees in consideration for the technical and consulting services provided by and the intellectual property rights licensed by 1Verge Internet; and

Ÿ have an exclusive option to purchase all of the equity interests in 1Verge Information and Jiaheyi when and to the extent permitted under PRC laws.

We do not have equity interest in 1Verge Information or Jiaheyi. However, as a result of these contractual arrangements, we are considered the primary beneficiary of 1Verge Information and Jiaheyi, and we treat them as our consolidated affiliated entities under the generally accepted accounting principles in the United States, or U.S. GAAP. We have consolidated the financial results of these companies in our consolidated financial statements in accordance with U.S. GAAP. For the three years ended December 31, 2007, 2008 and 2009, and the nine months ended September 30, 2010, we received nil service or license fees under the amended and restated exclusive technical and consulting services, trademark license and domain name license agreements referred to in “Corporate Structure—Agreements that Transfer Economic Benefits to Us” from 1Verge Information or Jiaheyi as neither of them has yet to achieve profitability. For a description of these contractual arrangements, see “Corporate Structure.” For a detailed description of the regulatory environment that necessitates the adoption of our corporate structure, see “Regulation.” For a detailed description of the risks associated with our corporate structure and the contractual arrangements that support our corporate structure, see “Risk Factors—Risks Related to Our Corporate Structure.”

Corporate Information

Our principal executive offices are located at 5/F, SinoSteel Plaza, 8 Haidian Street, Beijing, 100080, the People’s Republic of China. Our telephone number at this address is +86 (10) 5885-1881. Our registered office in the Cayman Islands is located at Clifton House, 75 Fort Street, P.O. Box 1350, Grand Cayman, KY1-1108 Cayman Islands. Our telephone at this address is +1 (345) 949-4900. We also have three representative offices in Shanghai, Guangzhou and Chengde, and a branch in Xi’an, China.

Investors should submit any inquiries to the address and telephone number of our principal executive offices set forth above. Our website is www.youku.com and the information contained on this website is not a part of this prospectus. Our agent for service of process in the United States is Law Debenture Corporate Services Inc., located at 400 Madison Avenue, 4^th Floor, New York, New York 10017.

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CONVENTIONS USED IN THIS PROSPECTUS

In this prospectus, unless the context indicates otherwise, references to:

Ÿ “we,” “us,” “our company,” “our,” and “Youku” refer to Youku.com Inc., its subsidiaries and consolidated affiliated entities;

Ÿ “ordinary shares” refer to, prior to the completion of this offering, our ordinary shares, par value US$0.00001 per share, and, after the completion of this offering, collectively our Class A and Class B ordinary shares, par value US$0.00001 per share;

Ÿ “preferred shares” refer to our Series A, Series B-1, Series B-2, Series C, Series D, Series E and Series F convertible preferred shares, par value US$0.00001 per share;

Ÿ “ADS” refers to American depositary shares, each of which represents                      Class A ordinary shares;

Ÿ “China” or the “PRC” refers to the People’s Republic of China excluding, for the purpose of this prospectus only, Hong Kong, Macau and Taiwan;

Ÿ “Renminbi” or “RMB” refers to the legal currency of China;

Ÿ “$”, “US$”, “dollars” or “U.S. dollars” refers to the legal currency of the United States;

Ÿ “monthly unique visitors” means the number of unique visitors to a specific website within a given month. Once an individual has visited a site in a given month, all subsequent visits from the same IP address during such month are not additive to the monthly unique visitor tally; and

Ÿ “commissions earned by third-party advertising agencies” means the estimated amount of commissions earned by advertising agencies who purchase our services.

Except as otherwise indicated, all information in this prospectus assumes no exercise by the underwriters of their option to purchase additional ADSs.

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THE OFFERING

The following assumes that the underwriters will not exercise their option to purchase additional ADSs in the offering, unless otherwise indicated.

Price per ADS US$            .

ADSs offered by us                 ADSs.

ADS to Class A ordinary share ratio Each ADS represents the right to receive              Class A ordinary shares, par value US$0.00001 per share.

ADSs outstanding immediately after this offering                 ADSs.

Ordinary shares outstanding immediately after this offering             shares, par value $0.00001 per share, comprised of (i)              Class A ordinary shares and (ii)              Class B ordinary shares.

The ADSs The depositary will hold the Class A ordinary shares underlying your ADSs and you will have rights as provided for in the deposit agreement.

We do not expect to pay dividends in the foreseeable future. If, however, we declare dividends on our ordinary shares, the depositary will pay you the cash dividends and other distributions it receives on our ordinary shares, after deducting its fees and expenses.

You may turn in your ADSs to the depositary in exchange for Class A ordinary shares. The depositary will charge you fees for any exchange.

We may amend or terminate the deposit agreement without your consent. If you continue to hold your ADSs, you agree to be bound by the deposit agreement as amended.

To better understand the terms of the ADSs, you should carefully read the “Description of American Depositary Shares” section of this prospectus. You should also read the deposit agreement, which is filed as an exhibit to the registration statement that includes this prospectus.

Ordinary shares After the completion of this offering, our ordinary shares will consist of Class A ordinary shares and Class B ordinary

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shares. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. Subject to certain exceptions, in respect of matters requiring shareholders’ vote, each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to three votes. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any transfer of Class B ordinary shares by a holder thereof to any person or entity which is not an affiliate of such holder, such Class B ordinary shares shall be automatically and immediately converted into the equal number of Class A ordinary shares.

Option to purchase additional ADSs We have granted to the underwriters an option, exercisable within 30 days from the date of this prospectus, to purchase up to an additional              ADSs.

Reserved ADSs At our request, the underwriters have reserved for sale, at the initial public offering price, up to an aggregate of              ADSs offered in this offering to some of our directors, officers, employees, business associates and related persons through a directed share program.

Use of proceeds We expect that we will receive net proceeds of approximately US$             million from this offering (after deducting underwriting discounts and commissions and estimated offering expenses payable by us).

We intend to use the net proceeds from this offering to invest in technology, infrastructure and product development efforts, acquire additional video content and expand our sales and marketing efforts and for other general corporate purposes, including working capital needs and potential acquisitions (although we are not currently negotiating any such acquisitions). See “Use of Proceeds” for more information.

NYSE symbol YOKU.

Depositary Citibank, N.A.

Lock-up We, our directors and executive officers, all of our shareholders and certain of our option holders have agreed with the underwriters not to sell, transfer or dispose of any ADSs, ordinary shares or similar securities for a period of 180 days after the date of this prospectus, subject to certain exceptions. In addition, through a letter agreement, we will instruct Citibank, N.A., as depositary, not to accept any deposit of any ordinary shares or issue any ADSs for 180 days after the date of this prospectus unless we consent to such deposit or issuance, and

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not to provide consent without the prior written consent of Goldman Sachs (Asia) L.L.C. The foregoing does not affect the right of ADS holders to cancel their ADSs and withdraw the underlying ordinary shares. Moreover, the shareholders of 1Verge Holdings Ltd., which will directly hold a total of 626,773,147 Class B ordinary shares of our company on an as-converted basis upon the completion of this offering, have agreed among themselves not to sell our shares through 1Verge Holdings Ltd. without the unanimous consent of 1Verge Holdings Ltd.’s board of directors for a period of two years after the completion of this offering. See “Shares Eligible For Futures Sales” and “Underwriting.”

Risk factors See “Risk Factors” and other information included in this prospectus for a discussion of risks you should carefully consider before investing in the ADSs.

The number of ordinary shares that will be outstanding immediately after this offering:

Ÿ is based upon              ordinary shares outstanding as of the date of this prospectus, assuming the conversion of all outstanding convertible redeemable preferred shares, or preferred shares, and the preferred shares issuable upon the exercise of all outstanding warrants into              ordinary shares immediately upon the completion of this offering;

Ÿ excludes              ordinary shares issuable upon the exercise of options outstanding as of the date of this prospectus, at a weighted average exercise price of US$             per share; and

Ÿ excludes              ordinary shares reserved for future issuances under our 2006 Stock Option Scheme, as amended, and our 2010 Share Incentive Plan.

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SUMMARY CONSOLIDATED FINANCIAL DATA

The following summary consolidated statements of operations data for the years ended December 31, 2007, 2008, 2009 and the summary consolidated balance sheet data as of December 31, 2008, 2009 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary consolidated statement of operations data for the nine month periods ended September 30, 2009 and 2010 and summary consolidated balance sheet data as of September 30, 2010 have been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. You should read this Summary Consolidated Financial Data together with our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with U.S. GAAP.

	Year Ended December 31,									Nine Months Ended September 30,
	2007			2008			2009			2009			2010
	RMB			RMB			RMB			RMB			RMB			US$
	(in thousands, except for share and per share date)
										(Unaudited)			(Unaudited)			(Unaudited)
Consolidated Statement of Operations Data
Net revenues(1)		1,778			33,022			153,626			99,784			234,623			35,068
Cost of revenues(2)		(46,148	)		(171,130	)		(216,708	)		(157,684	)		(248,719	)		(37,175	)
Gross loss		(44,370	)		(138,108	)		(63,082	)		(57,900	)		(14,096	)		(2,107	)
Operating expenses(2):
Sales and marketing		(22,469	)		(35,086	)		(72,746	)		(46,485	)		(91,527	)		(13,680	)
Product development		(15,530	)		(15,398	)		(20,908	)		(15,003	)		(21,260	)		(3,178	)
General and administrative		(5,843	)		(14,367	)		(18,523	)		(13,043	)		(18,716	)		(2,797	)
Total operating expenses		(43,842	)		(64,851	)		(112,177	)		(74,531	)		(131,503	)		(19,655	)
Loss from operations		(88,212	)		(202,959	)		(175,259	)		(132,431	)		(145,599	)		(21,762	)
Interest income		1,013			5,384			2,054			1,840			1,068			160
Interest expense		—			(4,240	)		(6,835	)		(5,401	)		(4,963	)		(742	)
Amortization of debt issuance costs		—			(2,380	)		—			—			—			—
Change in fair value of derivative financial liabilities and warrant liability		(2,422	)		(264	)		(2,313	)		(357	)		(17,532	)		(2,620	)
Others, net		(62	)		(1	)		67			48			65			10
Loss from operations before income taxes		(89,683	)		(204,460	)		(182,286	)		(136,301	)		(166,961	)		(24,954	)
Income taxes		—			—			—			—			—			—
Net loss		(89,683	)		(204,460	)		(182,286	)		(136,301	)		(166,961	)		(24,954	)
Net loss per share:
Basic		(0.25	)		(0.56	)		(0.50	)		(0.37	)		(0.46	)		(0.07	)
Diluted		(0.25	)		(0.56	)		(0.50	)		(0.37	)		(0.46	)		(0.07	)
Net loss per ADS(3):
Basic
Diluted
Weighted-average ordinary shares outstanding:
Basic		365,011,250			365,134,375			365,432,916			365,268,611			365,675,115			365,675,115
Diluted		365,011,250			365,134,375			365,432,916			365,268,611			365,675,115			365,675,115
Pro forma net loss per share:
Basic								(0.13	)					(0.11	)		(0.02	)
Diluted								(0.13	)					(0.11	)		(0.02	)
Pro forma weighted-average ordinary shares outstanding:
Basic								1,454,990,172						1,555,698,080			1,555,698,080
Diluted								1,454,990,172						1,555,698,080			1,555,698,080
Selected non-GAAP Financial Data
Adjusted revenues(4)		1,778			39,401			191,492			122,545			288,511			43,122
Adjusted net loss(4)		(86,012	)		(200,531	)		(175,408	)		(132,696	)		(142,054	)		(21,232	)

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(1) Net revenues are presented net of commissions earned by third-party advertising agencies, as the term is defined on page 7, as set forth below:

	Year Ended December 31,						Nine Months Ended September 30,
	2007		2008		2009		2009		2010
	RMB		RMB		RMB		RMB		RMB		US$
	(in thousands)
							(Unaudited)		(Unaudited)		(Unaudited)
Commissions earned by third-party advertising agencies		—		6,379		37,866		22,761		53,888		8,054

(2) Including share-based compensation expenses as set forth below:

	Year Ended December 31,						Nine Months Ended September 30,
	2007		2008		2009		2009		2010
	RMB		RMB		RMB		RMB		RMB		US$
	(in thousands)
							(Unaudited)		(Unaudited)		(Unaudited)
Allocation of Share-based Compensation Expenses
Cost of revenues		—		259		283		206		550		82
Product development		684		1,401		1,657		1,206		2,038		305
Sales and marketing		141		861		1,690		1,161		3,645		545
General and administrative		424		1,144		935		675		1,142		170
Total		1,249		3,665		4,565		3,248		7,375		1,102

(3) Each ADS represents              Class A ordinary shares.

(4) We define adjusted revenues, a non-GAAP financial measure, as the sum of net revenues and commissions earned by third-party advertising agencies, as the term is defined on page 7. We define adjusted net loss, a non-GAAP financial measure, as net loss excluding share-based compensation expenses and change in fair value of derivative financial liabilities and warrant liability. We review adjusted revenues and adjusted net loss together with net revenues and net loss to obtain a better understanding of our operating performance. We also believe it is useful supplemental information for investors and analysts to assess our operating performance with the effect of commissions earned by third-party advertising agencies, as the term is defined on page 7, and without the effect of non-cash share-based compensation expenses and change in fair value of derivative financial liabilities and warrant liability, which have been and will continue to be significant recurring factors in our business. However, the use of adjusted revenues and adjusted net loss has material limitations as an analytical tool. One of the limitations of using non-GAAP adjusted revenues is that it excludes an item that is not typically excluded from net revenues. One of the limitations of using non-GAAP adjusted net loss is that it does not include all items that impact our net loss for the period. In addition, because adjusted revenues and adjusted net loss are not calculated in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider adjusted revenues and adjusted net loss in isolation from or as an alternative to net revenues and net loss, respectively, prepared in accordance with U.S. GAAP. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

	Year Ended December 31,									Nine Months Ended September 30,
	2007			2008			2009			2009			2010
	RMB			RMB			RMB			RMB			RMB			US$
	(in thousands)
Net revenues		1,778			33,022			153,626			99,784			234,623			35,068
Add back: Commissions earned by third-party advertising agencies		—			6,379			37,866			22,761			53,888			8,054
Adjusted revenues		1,778			39,401			191,492			122,545			288,511			43,122
Net loss		(89,683	)		(204,460	)		(182,286	)		(136,301	)		(166,961	)		(24,954	)
Add back: share-based compensation expenses		1,249			3,665			4,565			3,248			7,375			1,102
Add back: change in fair value of derivative financial liabilities and warrant liability		2,422			264			2,313			357			17,532			2,620
Adjusted net loss		(86,012	)		(200,531	)		(175,408	)		(132,696	)		(142,054	)		(21,232	)

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	As of December 31,						As of September 30,
	2008			2009			2010						2010
	RMB			RMB			RMB			US$			RMB		US$
	(in thousands)
													Pro Forma(1)
							(Unaudited)						(Unaudited)
Consolidated Balance Sheet Data
Cash and cash equivalents		88,915			301,608			440,554			65,848			440,554		65,848
Total current assets		228,600			384,322			632,538			94,543			632,538		94,543
Total assets		291,746			441,741			738,798			110,426			738,798		110,426
Total current liabilities		60,159			132,479			260,042			38,870			260,042		38,870
Total liabilities		92,115			146,754			281,833			42,127			281,833		42,127
Convertible redeemable preferred shares		507,614			780,599			1,102,325			164,759			—		—
Total equity (deficit)		(307,983	)		(485,612	)		(645,360	)		(96,460	)		456,965		68,299

(1) Pro forma basis reflects the conversion of all outstanding preferred shares on a 1-for-1 basis into an aggregate of 1,190,022,965 ordinary shares as of September 30, 2010.

Additional Non-GAAP Financial Measure—Adjusted EBITDA

To supplement our consolidated financial statements which are presented in accordance with U.S. GAAP and in addition to the previously mentioned non-GAAP financial measures of adjusted revenues and adjusted net loss, we also use Adjusted EBITDA as an additional non-GAAP financial measure. Adjusted EBITDA, as we present it, represents net income or loss before income taxes, interest expenses, interest income, depreciation and amortization, further adjusted for change in fair value of derivative financial liabilities and warrant liability, share-based compensation expense and other non-operating items. We present Adjusted EBITDA because it is used by our management to evaluate our operating performance. We also believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our consolidated results of operations in the same manner as our management and in comparing financial results across accounting periods and to those of our peer companies.

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The following tables reconcile our Adjusted EBITDA in 2007, 2008, 2009 and the nine months ended September 30, 2009 and 2010, as well as the nine quarters in the period from July 1, 2008 to September 30, 2010 to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, which is net loss:

	Year Ended December 31,									Nine Months Ended September 30,
	2007			2008			2009			2009			2010
	RMB			RMB			RMB			RMB			RMB			US$
	(in thousands)
Net loss		(89,683	)		(204,460	)		(182,286	)		(136,301	)		(166,961	)		(24,954	)
Add (deduct):
Income taxes		—			—			—			—			—			—
Interest expense		—			4,240			6,835			5,401			4,963			742
Interest income		(1,013	)		(5,384	)		(2,054	)		(1,840	)		(1,068	)		(160	)
Depreciation		8,726			26,923			36,207			26,335			32,283			4,825
Amortization of intangible assets		—			1,450			4,581			2,383			31,935			4,773
Share-based compensation		1,249			3,665			4,565			3,248			7,375			1,102
Amortization of debt issuance costs		—			2,380			—			—			—			—
Change in fair value of derivative financial liabilities and warrant liability		2,422			264			2,313			357			17,532			2,620
Others, net		62			1			(67	)		(48	)		(65	)		(10	)
Adjusted EBITDA		(78,237	)		(170,921	)		(129,906	)		(100,465	)		(74,006	)		(11,062	)

	Three Months Ended
	September 30, 2008			December 31, 2008			March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009			March 31, 2010			June 30, 2010			September 30, 2010
	RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB
	(in thousands)
Net loss		(55,761	)		(61,366	)		(52,196	)		(44,714	)		(39,391	)		(45,985	)		(51,201	)		(62,638	)		(53,122	)
Add (deduct):
Income taxes		—			—			—			—			—			—			—			—			—
Interest expense		1,519			1,898			1,960			1,813			1,628			1,434			1,403			1,043			2,517
Interest income		(1,872	)		(1,872	)		(693	)		(685	)		(462	)		(214	)		(219	)		(584	)		(265	)
Depreciation		7,545			7,900			8,271			8,746			9,318			9,872			10,508			11,034			10,741
Amortization of intangible assets		360			725			644			686			1,053			2,198			3,571			10,229			18,135
Share-based compensation		1,044			961			994			1,029			1,225			1,317			1,864			2,095			3,416
Amortization of debt issuance costs		869			869			—			—			—			—			—			—			—
Change in fair value of derivative financial liabilities and warrant liability		(44	)		(397	)		240			50			67			1,956			748			4,808			11,976
Others, net		(1	)		68			25			(69	)		(4	)		(19	)		(77	)		(30	)		42
Adjusted EBITDA		(46,341	)		(51,214	)		(40,755	)		(33,144	)		(26,566	)		(29,441	)		(33,403	)		(34,043	)		(6,560	)

The use of Adjusted EBITDA has certain limitations because it does not reflect all items of income and expense that affect our operations. Items excluded from Adjusted EBITDA are significant components in understanding and assessing our operating and financial performance. Depreciation expense, amortization, income taxes, interest expenses and interest income as well as change in fair value of derivative financial liabilities and warrant liability, share-based compensation expenses and other non-operating items have been and may continue to be incurred in our business and are not reflected in the presentation of Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, Adjusted EBITDA does not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by reconciling this non-GAAP financial measure to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. The term Adjusted EBITDA is not defined under U.S. GAAP, and Adjusted EBITDA is not a measure of net

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income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing our operating and financial performance, you should not consider such data in isolation or as a substitute for our net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. Further, Adjusted EBITDA may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

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RISK FACTORS

An investment in our ADSs involves significant risks. You should consider carefully all of the information in this prospectus, including the risks and uncertainties described below, before making an investment in our ADSs. Any of the following risks could have a material adverse effect on our business, financial condition and results of operations. In any such case, the market price of our ADSs could decline, and you may lose all or part of your investment.

Risks Related to Our Business and Industry

Our limited operating history makes it difficult to evaluate our business and prospects.

We launched our website and online video service in December 2006 and have experienced rapid growth since then. We expect our expansion trend to continue as we grow our user and customer bases and explore new market opportunities. However, due to our limited operating history, our historical growth rate may not be indicative of our future performance. We cannot assure you that we will grow at the same rate as we did in the past. You should consider our prospects in light of the risks and uncertainties fast-growing companies with a limited operating history may encounter.

We incurred net losses in 2007, 2008, 2009 and the nine months ended September 30, 2010 and may continue to incur losses in the future.

We incurred net losses in the amount of RMB89.7 million, RMB204.5 million, RMB182.3 million and RMB167.0 million (US$25.0 million) in 2007, 2008, 2009 and the nine months ended September 30, 2010, respectively, primarily due to significant bandwidth and content costs, and capital expenditures required to ramp up our business and operations at the early stage of development of our business. Our net losses increased from RMB136.3 million in the nine months ended September 30, 2009 to RMB167.0 million (US$25.0 million) in the nine months ended September 30, 2010 primarily due to the increases in our sales and marketing efforts, content costs and bandwidth costs. Our ability to achieve profitability is affected by various factors, many of which are beyond our control. For example, our revenues and profitability depend on the continuous development of the online advertising industry in China and brand advertisers’ allocation of more budgets to online video websites. We cannot assure you that online advertising, as a new marketing channel, will become more widely accepted in China or that the advertisers will increase their spending on online video websites. The procurement of Internet bandwidth has historically accounted for the majority of our cost of revenues. Although we expect our bandwidth costs as a percentage of net revenues to decrease over time, we expect our bandwidth costs to increase on an absolute basis as traffic to our website grows. If we cannot successfully offset our increased bandwidth costs with an increase in net revenues, our gross margin, financial condition and results of operations could be materially and adversely affected. Therefore, although we expect our net loss to decrease as a percentage of our total net revenues in the foreseeable future, we may continue to incur net losses in the future due to our continued investments in bandwidth, content and technology. We may also continue to incur net losses in the future due to changes in the macroeconomic and regulatory environment, competitive dynamics and our inability to respond to these changes in a timely and effective manner.

We generate substantially all of our revenues from online advertising. If we fail to retain existing advertisers or attract new advertisers to advertise on our website or if we are unable to collect accounts receivable from the advertisers or advertising agencies in a timely manner, our financial condition, results of operations and prospects may be materially and adversely affected.

We generate substantially all of our revenues from online advertising. We retain existing advertisers and attract new advertisers by maximizing return on their investment. On the one hand, we provide our advertisers with in-video advertisements and cost-effective advertising solutions which

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combine the visual impact and engagement of traditional television-like multimedia formats with the interactivity and targeting capability of the Internet. On the other hand, our large user traffic and desirable user demographic characteristics provide advertisers with a broad reach and optimal monetization results. All of our advertisers in 2007 remained as our advertisers in 2008. Over 60% and 70% of our advertisers in 2008 and 2009, respectively, remained as our advertisers in 2009 and 2010, respectively. However, we cannot assure you that we will continue to maintain a high retention rate in the future or attract new advertisers continuously. If, however, our advertisers determine that their expenditures on online video websites do not generate expected returns, they may allocate a portion or all of their advertising budgets to other advertising channels such as television, newspapers and magazines and reduce or discontinue business with us. Since most of our advertisers are not bound by long-term contracts, they may amend or terminate advertising arrangements with us easily without incurring liabilities. Failure to retain existing advertisers or attract new advertisers to advertise on our website may materially and adversely affect our business, financial condition, results of operations and prospects.

Substantially all of our online advertising agreements are entered into with various third-party advertising agencies. In China’s advertising industry, advertising agencies typically have good relationships and maintain longer periods of cooperation with the brand advertisers they represent as compared to media companies which provide advertising services on their properties. As a relatively young media company, we intend to strategically leverage advertising agencies’ relationships and network resources to increase our sales and expand our customer base. Therefore, in order to establish long-term strategic cooperation with third-party advertising agencies, we generally enter into advertising contracts with third-party advertising agencies, which represent advertisers even if we have direct contact with such advertisers. As a result, we rely on third-party advertising agencies for sales to, and collection of payment from, our advertisers. In consideration for the third-party advertising agencies’ services, we pay them commissions based on the volume of business they bring to us. The financial soundness of our advertisers and advertising agencies may affect our collection of accounts receivable. We make a credit assessment of the advertiser and advertising agency to evaluate the collectibility of the advertising service fees before entering into an advertising contract. However, we cannot assure you that we are or will be able to accurately assess the creditworthiness of each advertiser or advertising agency, and any inability of advertisers or advertising agencies to pay us in a timely manner may adversely affect our liquidity and cash flows.

We maintain and enhance our business relationships with these third-party advertising agencies by inviting such agencies to Youku-sponsored seminars and public relationship events. We also attend trade exhibitions or events organized by each other regularly, through which we stay in effective communications with these agencies. We do not have long-term cooperation agreements or exclusive arrangements with these agencies and they may elect to direct business opportunities to other advertising service providers, including our competitors. If we fail to retain and enhance the business relationships with third-party advertising agencies, we may suffer from a loss of advertisers and our business, financial condition, results of operations and prospects may be materially and adversely affected. In addition, there has been some consolidation in China’s online advertising market. If this trend continues, a small number of large advertising agencies may be in a position to demand higher commission for advertising agency services, which could reduce our gross margin.

The online video industry in China and user acceptance of our online video content may not grow as quickly as expected, which may adversely affect our revenues and business prospects.

Our business and prospects depend on the continuing development of the online video industry in China. As an emerging industry, China’s online video industry has experienced substantial growth in recent years both in terms of users and content. We cannot assure you, however, that the online video

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industry will continue to grow as rapidly as it has in the past. With the development of technology, new forms of media may emerge and render online video websites less attractive to users. Growth of the online video industry is affected by numerous factors, such as users’ general online video experience, technological innovations, development of Internet and Internet-based services, regulatory changes, especially regulations affecting copyrights, and the macroeconomic environment. If the online video industry in China does not grow as quickly as expected or if we fail to benefit from such growth by successfully implementing our business strategies, our user traffic may decrease and our business and prospects may be adversely affected.

Increases in market prices for professionally produced content may have an adverse effect on our business, financial condition and results of operations.

A majority of our user traffic is attributable to professionally produced content. The market prices for professionally produced content, especially popular movies and television serial dramas, have increased significantly in China during the past few years. For example, according to our internal records, the average license fee for television serial drama has increased in 2009 by more than 200% as compared to 2008, and such fee has increased in 2010 to date by more than 100% as compared to 2009. The average license fee for movies has also increased in 2010 to date by more than 90% as compared to 2009. Due to the improving monetization perspective of online video advertising, online video websites are generating more revenues and are competing aggressively to license popular television serial dramas and movies, and the increasingly intense content bidding process has in turn led to increases in license fees of professionally produced content in general. In addition, as the market develops, the expectations of copyright owners, distributors and industry associations may continue to rise, and as such they may demand higher licensing fees for professionally produced content. Furthermore, with the expansion of our content library, we expect the costs for professionally produced content to continue to increase. If we are unable to generate sufficient revenues to outpace the increase in market prices for professionally produced content, we may incur more losses and our business, financial condition and results of operations may be adversely affected.

We operate in a capital intensive industry and require significant amount of cash to fund our operations and bandwidth, content and technology acquisitions. If we cannot obtain sufficient capital, our business, financial condition and prospects may be materially and adversely affected.

The operation of an online video business requires significant upfront capital expenditures as well as continuous, substantial investment in content, technology and infrastructure. To date, we have financed our operations primarily though private placements of preferred shares to investors, including the issuance of US$50 million Series F preferred shares in September 2010, and to a lesser extent, debt financing and cash flow from operations. We believe that our cash, the anticipated cash flow from operations, the net proceeds we expect to receive from this offering and the borrowings under our loan agreements will be sufficient to meet our anticipated cash needs for the next 12 months. However, in order to implement our development strategies to expand our infrastructure and optimize our services across Internet-enabled devices, and further expand and diversify our revenue sources, we may incur additional capital needs in the future. We may obtain additional financing, including equity offering and debt financing in capital markets, to fund the operation and expansion of our online video business. Our ability to obtain additional financing in the future, however, is subject to a number of uncertainties, including:

Ÿ our future business development, financial condition and results of operations;

Ÿ general market conditions for financing activities by companies in our industry; and

Ÿ macroeconomic, political and other conditions in China and elsewhere.

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If we cannot obtain sufficient capital to meet our capital expenditure needs, we may not be able to execute our growth strategies and our business, financial condition and prospects may be materially and adversely affected.

Videos and other content displayed on our website may be found objectionable by PRC regulatory authorities and may subject us to penalties and other administrative actions.

The PRC government has adopted regulations governing Internet access and the distribution of videos and other information over the Internet. Under these regulations, Internet content providers and Internet publishers are prohibited from posting or displaying over the Internet content that, among other things, violates PRC laws and regulations, impairs the national dignity of China or the public interest, or is obscene, superstitious, fraudulent or defamatory. Furthermore, Internet content providers are also prohibited from displaying content that may be deemed by relevant government authorities as “socially destabilizing” or leaking “state secrets” of the PRC. Failure to comply with these requirements may result in the revocation of licenses to provide Internet content or other licenses, the closure of the concerned websites and reputational harm. The website operator may also be held liable for such censored information displayed on or linked to their website.

In addition to professionally produced content, we allow our users to upload videos to our website. Our users can upload all types of content including user-created and professionally produced content and can upload certain graphical files for limited purposes, such as updating user biographies. After a user registers and before each upload, we require the user to click a check box to confirm that the content to be uploaded is in compliance with the terms and conditions set forth in the user agreement, does not infringe other parties’ legal rights, including copyright, and to confirm that he or she is responsible for the content he or she uploads or otherwise distributes on Youku.com. Pursuant to the user agreement, each user agrees to indemnify us for all damages arising from third-party claims against us caused by violating or infringing content uploaded or linked by the user. If we find a user has violated the user agreement, applicable laws or regulations or other parties’ legal rights, we may terminate the user account and block the user’s future uploads without prior notice. In addition, we remove users’ uploads when we are notified or made aware by copyright owners or from other sources of copyright infringements by users, such as lists of inappropriate or infringing content that the regulatory authorities publish from time to time and market information on releases of movies and television serial dramas. We have a team of over 300 contract employees dedicated to screening and monitoring the content uploaded on our website and removing inappropriate or infringing content. Substantially all of the videos uploaded on our website are manually screened by our contract employees. All of the other content, primarily consisting of comments posted by users, is first screened by our filtering systems and the content containing prohibitive words or images is manually screened by our contract employees. We provide training to these contract employees and supervise their work. Although we have adopted internal procedures to monitor the content displayed on our website, due to the significant amount of content uploaded by our users currently amounting to an average of 60,000 files on a daily basis, we may not be able to identify all the videos or other content that may violate relevant laws and regulations due to the large amount of content uploaded by our users everyday. See “Business—Technology and Infrastructure—Content Monitoring and Copyright Protection” for more details relating to our content monitoring procedures. Failure to identify and prevent illegal or inappropriate content from being displayed on our website may subject us to liability. In addition, these laws and regulations are subject to interpretation by the relevant authorities, and it may not be possible to determine in all cases the types of content that could result in our liability as a website operator. For a detailed discussion, see “Regulation—Regulations on Internet Content Services” and “Regulation—Regulations on Information Security.”

To the extent that PRC regulatory authorities find any content displayed on our website objectionable, they may require us to limit or eliminate the dissemination of such content on our website in the form of take-down orders or otherwise. In the past, we have from time to time received

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phone calls and written notices from the relevant PRC regulatory authorities requesting us to delete certain content that the government deemed inappropriate or sensitive. For example, we were requested by the regulatory authority to take down a Chinese movie named “Apple” in 2008 due to certain inappropriate content in the movie. The State Administration of Radio, Film and Television, or SARFT, recently published a list of content that is objectionable, and our content screening team has been reviewing the user-uploaded content and removing those mentioned on the list. In addition, regulatory authorities may impose penalties on us based on content displayed on or linked to our website in cases of material violations, including a revocation of our operating licenses or a suspension or shutdown of our online operations. Although we have not been penalized for objectionable content in the past, in the event that the PRC regulatory authorities find the video content on our website objectionable and impose penalties on us or take other administrative actions against us in the future, our business, results of operations and reputation may be materially and adversely affected. Moreover, the costs of compliance with these regulations may continue to increase as a result of more content uploaded by our increasing number of users.

In addition, we operate our website through our consolidated affiliated entity, 1Verge Information, and our ability to comply with laws and regulations described above depends in large part on the experience and skills of, and our control over, the management of 1Verge Information. We rely on contractual arrangements with 1Verge Information and its shareholders to exercise control over the management and operations of 1Verge Information. These contractual arrangements may not be as effective as direct ownership in providing us with control over 1Verge Information. 1Verge Information and its shareholders may fail to take certain actions required for our business or follow our instructions to comply with the relevant PRC regulations despite their contractual obligations to do so. On the other hand, if we had direct ownership of 1Verge Information, we would be able to directly exercise our rights as a shareholder to effect changes in the board of directors of 1Verge Information, which in turn could effect changes at the management level, subject to any applicable fiduciary obligations. See “—Risks Related to Our Corporate Structure—We rely on contractual arrangements with our consolidated affiliated entities in China and their shareholders for our operations, which may not be as effective as direct ownership in providing operational control.”

We have been, and may continue to be, subject to liabilities for infringement of third-party intellectual property rights or other allegations based on the content available on our website or services we provide.

We have been involved in litigation based on allegations of infringement of third-party copyright and other rights, such as privacy and image rights, due to the content available on our website. We were subject to a total of 2, 34, 252 and 160 lawsuits in China for alleged copyright infringement in 2007, 2008, 2009 and the nine months ended September 30, 2010, respectively. Approximately 70% of these lawsuits were rejected by relevant PRC courts, withdrawn by the plaintiffs or settled by the parties. For those cases we lost, we were ordered by various PRC courts to pay damages in an aggregate amount of approximately RMB0.1 million, RMB0.4 million, RMB1.4 million and RMB0.1 million in 2007, 2008, 2009 and 2010 (from January 1, 2010 to September 30, 2010), respectively. As of December 31, 2009, we accrued RMB2.0 million (US$0.3 million) in expenses and other liabilities related to cases arising on or before December 31, 2009 based on judgments by court and out-of-court settlements made after December 31, 2009. We have implemented internal procedures, with a dedicated team of over 300 contract employees, to review videos uploaded by our users and remove any infringing video promptly after we receive infringement notification from the legitimate rights owner claiming that their rights are infringed by a video on our website. See “Business—Technology and Infrastructure—Content Monitoring and Copyright Protection” for more details relating to our content monitoring procedures. Due to the significant number of videos uploaded by users, which currently amounts to an average of 60,000 files on a daily basis, we may not be able to identify all content that may infringe on third-party rights. Moreover, some rights owners may not send us a notice before

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bringing a lawsuit against us. Thus, our failure to identify unauthorized videos posted on our website has subjected us to, and may continue to subject us to, claims of infringement on third-party intellectual property rights or other rights. In addition, we may be subject to administrative actions brought by the National Copyright Administration of the PRC or its local branches for alleged copyright infringement.

Although we have not been subject to claims or lawsuits outside China, we cannot assure you that we will not become subject to copyright laws in other jurisdictions, such as the United States, by virtue of our listing in the United States, the ability of users to access our videos in the United States and other jurisdictions, the ownership of our ADSs by investors, the extraterritorial application of foreign law by foreign courts or otherwise. In addition, as a publicly listed company, we may be exposed to increased risk of litigation. If a claim of infringement brought against us in the United States or other jurisdictions is successful, we may be required to (i) pay substantial statutory or other damages and fines, (ii) remove relevant content from our website or (iii) enter into royalty or license agreements which may not be available on commercially reasonable terms or at all.

We may also face litigation or administrative actions for defamation, negligence, or other purported injuries resulting from the content we provide or the nature of our services. Such litigation and administrative actions, with or without merits, may be expensive and time-consuming and may result in significant diversion of resources and management attention from our business operations. Furthermore, such litigation or administrative actions may adversely affect our brand image and reputation.

In addition, we operate our website through our consolidated affiliated entity, 1Verge Information, and our ability to comply with laws and regulations described above depends in large part on the experience and skills of, and our control over, the management of 1Verge Information. Our control over the management and operations of 1Verge Information through contractual arrangements may not be as effective as that through direct ownership. See “—Risks Related to Our Corporate Structure—We rely on contractual arrangements with our consolidated affiliated entities in China and their shareholders for our operations, which may not be as effective as direct ownership in providing operational control.”

Advertisements shown on our website may subject us to penalties and other administrative actions.

Under PRC advertising laws and regulations, we are obligated to monitor the advertising content shown on our website to ensure that such content is true, accurate and in full compliance with applicable laws and regulations. In addition, where a special government review is required for specific types of advertisements prior to website posting, such as advertisements relating to pharmaceuticals, medical instruments, agrochemicals and veterinary pharmaceuticals, we are obligated to confirm that such review has been performed and approval has been obtained from competent governmental authority, which is generally the local branch of the SAIC. To fulfill these monitoring functions, we include clauses in all of our advertising contracts requiring that all advertising content provided by advertisers must comply with relevant laws and regulations. Under PRC law, advertising agencies are liable for all damages to us caused by their breach of such representations. Before a sale is confirmed and the advertisement is publicly posted on our website, our account execution personnel, which is a separate back-office team, are required to review all advertising materials, including video commercials, flashes and pictures, to ensure there is no racial, violent, pornographic or any other improper content, and will request the advertiser to provide proof of governmental approval if the advertisement is subject to special government review. Violation of these laws and regulations may subject us to penalties, including fines, confiscation of our advertising income, orders to cease dissemination of the advertisements and orders to publish an announcement correcting the misleading information. In circumstances involving serious violations, such as posting a pharmaceutical product

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advertisement without approval, or posting an advertisement for fake pharmaceutical product, PRC governmental authorities may force us to terminate our advertising operation or revoke our licenses.

A majority of the advertisements shown on our website are provided to us by third-party advertising agencies on behalf of advertisers. While significant efforts have been made to ensure that the advertisements shown on our website are in full compliance with applicable laws and regulations, we cannot assure you that all the content contained in such advertisements is true and accurate as required by the advertising laws and regulations, especially given the uncertainty in the application of these laws and regulations. For example, Article 38 of the Advertisement Law provides that an advertisement operator who knows or should have known the posted advertisement is false or fraudulent will be subject to joint and several liability. Under Article 16 of the Detailed Implementation Rules on the Administrative Regulations for Advertisement, a website must not post any advertisements that are untrue or lacking the requisite governmental approval if such type of advertisements are subject to special governmental review. However, for the determination of the truth and accuracy of the advertisements and the actual or constructive knowledge of the website, there are no implementing rules or official interpretations, and such a determination is at the sole discretion of the relevant local branch of the SAIC, which results in uncertainty in the application of these laws and regulations. Although we have not been subject to penalties or administrative sanctions in the past for the advertisements shown on our website, if we are found to be in violation of applicable PRC advertising laws and regulations in the future, we may be subject to penalties and our reputation may be harmed, which may have a material and adverse effect on our business, financial condition, results of operations and prospects.

In addition, we operate our website through our consolidated affiliated entity, 1Verge Information, and our ability to comply with laws and regulations described above depends in large part on the experience and skills of, and our control over, the management of 1Verge Information. Our control over the management and operations of 1Verge Information through contractual arrangements may not be as effective as that through direct ownership. See “—Risks Related to Our Corporate Structure—We rely on contractual arrangements with our consolidated affiliated entities in China and their shareholders for our operations, which may not be as effective as direct ownership in providing operational control.”

Ineffective implementation of separation of our advertising sales and regulatory compliance functions may result in insufficient supervision over the content of advertisements shown on our website and may subject us to penalties or administrative actions.

We keep our advertising sales function separate from our team in charge of government compliance to address the potential conflicts between our compliance with relevant PRC advertising laws and regulations and advertising business, where we derive substantially all of our revenues. Before a sale is confirmed and the relevant advertisements are publicly posted on our website, our account execution personnel, which is a separate back-office team that does not interface directly with advertisers, are required to review all advertising materials, including video commercials, flashes and pictures, to ensure there is no racial, violent, pornographic or any other improper content. They will request the advertiser to provide proof of governmental approval if the advertisement is subject to special governmental review and such process is designed to enhance our regulatory compliance efforts. However, in the event that the separation of advertising sales and regulatory compliance functions is not effectively implemented, the content of our advertisements may not be in full compliance with applicable laws and regulations. Although we have been subject to nil penalties for the three years ended December 31, 2007, 2008 and 2009, and the nine months ended September 30, 2010, and have not been subject to any administrative actions in the past for the advertisements shown on our website, if we are found to be in violation of applicable laws and regulations in the future, we may be subject to penalties and our reputation may be harmed. This may have a material and adverse effect on our business, financial condition and results of operations.

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Changes in government policies or regulations may have a material and adverse effect on our business, financial condition and results of operations.

Our online video business is subject to strict government regulations in the PRC. Under the current PRC regulatory scheme, a number of regulatory agencies, including the SARFT, Ministry of Culture, Ministry of Industry and Information Technology, or MIIT, the General Administration of Press and Publication, or GAPP, and the State Council Information Office, or SCIO, jointly regulate all major aspects of the Internet industry, including the online video industry. Operators must obtain various government approvals and licenses, including an Internet content provider license, or ICP license, and an Internet audio/video program transmission license, prior to the commencement of online video operations. We have obtained the licenses and permits essential for our business operations. We have obtained the ICP license, the Internet audio/video program transmission license (currently covering the self-broadcast programs service and the Internet user uploaded audio/video program service) and a permit from the Beijing Drug Administration to post approved non-prescription drug advertisements on our website. We are in the process of upgrading our Internet audio/video program transmission license and applying for the approval from the SCIO to publish news on our website or disseminate news through the Internet. We currently operate a current events channel on our website which includes audio/video content relating to current topics and social events. We have made oral inquiries with the SCIO, and were orally informed that such operations do not violate the regulations on Internet news publication. Before obtaining the drug information permit, there were a small number of advertisements for non-prescription drugs shown on our website, which may not have been in compliance with the Administration Measures on Internet Drug Information Services and may subject us to administrative warnings, termination of any Internet drug advertisements on our website and other penalties which are not clearly defined in the measures, although we have not been sanctioned by the relevant governmental authority in the past. We are now qualified to post approved non-prescription drug advertisements on our website pursuant to the drug information permit, and we believe the risk of any penalties imposed on our past conduct is low. If the PRC government finds that we were operating without the proper licenses or approvals, promulgates new laws and regulations that require additional licenses or imposes additional restrictions on the operation of online video businesses and/or wireless and web-based subscription services that we plan to launch, the PRC government has the power to, among other things, levy fines, confiscate our income or the income of our affiliates, revoke our business licenses or the business licenses of our affiliates, and require us to discontinue or impose restrictions on the affected portion or our business. Any of these actions by the PRC government may have a material and adverse effect on our results of operations. In addition, the PRC government may promulgate regulations restricting the types and content of advertisements that may be transmitted online, which could have a direct adverse impact on our business.

Any lack of requisite permits for any of our online video content may expose us to regulatory sanctions.

On March 30, 2009, SARFT released a Notice on Strengthening the Administration of Online Audio/Video Content, or Notice. This Notice reiterated, among other things, that all movies and television shows released or published online must be in compliance with relevant regulations on the administration of radio, film and television. In other words, these movies and television shows, whether produced in the PRC or overseas, must be pre-approved by SARFT and distributors of these movies and television shows must obtain an applicable permit before releasing any movie or television show.

We rely on written representations from the content providers regarding the SARFT approval status of the content licensed to us. Under our content licensing agreements, the content providers generally represent and warrant that (i) the content they provide has legitimate copyright or authorization, and they are entitled to grant us the rights of communication through information networks; (ii) the content itself as well as the authorization or rights granted to us neither breach any applicable laws, regulations or public morals, nor impair any third party rights; and (iii) that they will

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indemnify us for any loss resulting from both the non-compliance of such content with the law and claims from third parties. However, we cannot guarantee that the remedies provided by these content providers, if any, will be sufficient to compensate us for potential regulatory sanctions imposed by SARFT due to violations of the approval and permit requirements. Nor can we ensure that any such sanctions will not adversely affect either the general availability of video content on our website or our reputation. In addition, such risks may persist due to ambiguities and uncertainties relating to the implementation and enforcement of the Notice.

If the online advertising industry does not further grow in China, our profitability and prospects may be materially and adversely affected.

Both the Internet and broadband penetration rates in China are relatively low as compared to those in many developed countries. Many advertisers in China have limited experience with online advertising, have historically allocated an insignificant portion of their advertising budgets to online advertising and may consider online advertising a less attractive channel than traditional broadcast and print media in promoting their products and services. Our profitability and prospects depend on the continuing development of the online advertising industry in China and may be affected by a number of factors, many of which are beyond our control, including:

Ÿ development of a larger user base with demographic characteristics attractive to advertisers;

Ÿ our ability to keep up with technological innovation and improvements in the measurement of user traffic and online advertising;

Ÿ acceptance of online advertising as an effective marketing channel;

Ÿ changes in government regulations or policies affecting the online advertising industry; and

Ÿ increased Internet usage in China.

We operate in a highly competitive market and we may not be able to compete successfully against our competitors.

We face significant competition, primarily from those companies that operate online video websites in China, such as Tudou.com, as well as from major Chinese Internet portals which provide online video products, such as SINA and Sohu. We compete with these companies for both users and advertisers. Some of our competitors have a longer operating history and significantly greater financial resources than we do, and in turn may be able to attract and retain more users and advertisers. Our competitors may compete with us in a variety of ways, including by obtaining exclusive online distribution rights for popular content, conducting brand promotions and other marketing activities, and making acquisitions. In addition, certain online video websites may continue to derive their revenues from providing content that infringes third-party copyright and may not monitor their websites for any such infringing content. As a result, we may be placed at a disadvantage to some of these websites that do not incur similar costs as we do with respect to content acquisition and content monitoring. If any of our competitors achieves greater market acceptance than we do or are able to offer more attractive online video content, our user traffic may decrease and our market share may decrease, which may result in a loss of advertisers and have a material and adverse effect on our business, financial condition and results of operations.

We also face competition from traditional advertising media such as television, newspapers, magazines, billboards, radio and other forms of out-of-home media. Most large companies in China allocate, and will likely continue to allocate, a significant portion of their advertising budgets to traditional advertising media, particularly television. If online advertising, as a new marketing channel, does not become more widely accepted in China, we may experience difficulties in competing with traditional advertising media.

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The success of our business depends on our ability to maintain and enhance our brand.

We believe that maintaining and enhancing our Youku brand is of significant importance to the success of our business. A well-recognized brand is critical to increasing our user base and, in turn, enhancing our attractiveness to advertisers. Since the online video market is highly competitive, maintaining and enhancing our brand depends largely on our ability to remain the market leader in China, which may be difficult and expensive.

With our large and comprehensive content library and an easy-to-use online interface, we have developed our reputation and established a leading position by providing our users with a superior online video experience. As a company with a limited operating history, we have conducted, and may continue to conduct, various marketing and brand promotion activities, mainly through cooperation with our business partners. We cannot assure you, however, that these activities will be successful and achieve the brand promotion effects we expect. In addition, any negative publicity in relation to our services or products, regardless of its veracity, could harm our brand image and, in turn, result in a reduced number of users. If we fail to maintain and enhance our brand, or if we incur excessive expenses in this effort, our business, financial condition and results of operations may be materially and adversely affected.

If we fail to continue to anticipate user preferences and provide products and services to attract and retain users, we may not be able to generate sufficient user traffic to remain competitive.

Our success depends on our ability to generate sufficient user traffic through provision of attractive products and services. To attract and retain users and compete against our competitors, we must continue to offer high-quality content that provides our users with a satisfactory online video experience. To this end, we must continue to source new professionally produced content, produce new in-house content or encourage more user-generated content, while balancing the value of each type of content to our advertising services. For example, with professionally produced content, we attract a majority of our user traffic and our advertisers can place targeted advertisements focusing on certain user demographics; with user-generated content, users can upload and share their own videos and spend longer time on our website, and a “community-like” environment enhances users’ loyalty to our website and such network effect broadens advertisers’ reach of audience; and with our in-house productions, we tailor such content to users’ preferences based on our industry experience and combine these productions with targeted advertising services such as product placements, which benefits both the users and our advertisers.

Based on the feedback on our website design and our statistics regarding users’ watching behavior, we keep developing new website features that appeal to users, such as designing more user-friendly content searching tools, creating additional interactive social functions or offering better website compatibility with new Internet-enabled devices. Due to our leading market position, we maintain a large content library to serve our users, which in turn leads to our continuing need to license more content covering a wider range of categories from the licensors of professionally produced content. Therefore, the licensors of professionally produced content have been willing to maintain good business relationships with us and value our relationships with them. We frequently attend industry seminars and public relationship events with professional content licensors to enhance such relationships. Other than the fees we pay to license content, we do not provide any additional compensation or benefits to professional content providers and their affiliates. Therefore, we must continue to grow our platform and content demand to keep our key customer status in order to maintain good relationships with current licensors of professionally produced content to renew our current licenses and license new content from them. Given that we operate in a rapidly evolving industry, we also need to continuously anticipate user preferences and industry changes and respond to such changes in a timely and effective manner. If we fail to cater to the needs and preferences of

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our users and, as a result, fail to deliver satisfactory user experience, we may suffer from reduced user traffic and our business and results of operations may be materially and adversely affected.

We operate in a rapidly evolving industry. If we fail to keep up with the technological developments and users’ changing requirements, our business, results of operations and prospects may be materially and adversely affected.

The online video industry is rapidly evolving and subject to continuous technological changes. Our success will depend on our ability to keep up with the changes in technology and user behavior resulting from the technological developments. For example, the development of broadband enabled the enjoyment of high definition videos online. In addition, the number of people accessing the Internet via devices other than personal computers, including mobile phones and other hand-held devices, has increased in recent years. If we do not adapt our products and services to such changes in an effective and timely manner, we may suffer from a decreased user traffic, which may result in a reduced number of advertisers using our online advertising services. Furthermore, changes in technologies may require substantial capital expenditures in product development as well as in modification of products, services or infrastructure. We may not execute our business strategies successfully due to a variety of reasons such as technical hurdles, misunderstanding or erroneous prediction of market demand or lack of necessary resources. Failure in keeping up with technological development may result in our products and services being less attractive, which in turn, may materially and adversely affect our business, results of operations and prospects.

Our quarterly revenues and operating results may fluctuate, which makes our results of operations difficult to predict and may cause our quarterly results of operations to fall short of expectations.

Our quarterly revenues and operating results have fluctuated in the past and may continue to fluctuate depending upon a number of factors, many of which are out of our control. For these reasons, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on our past results as an indication of our future performance. Our quarterly and annual revenues and costs and expenses as a percentage of our revenues may be significantly different from our historical or projected rates. Our operating results in future quarters may fall below expectations. Any of these events could cause the price of our ADSs to fall. Other factors that may affect our financial results include, among others:

Ÿ global economic conditions;

Ÿ our ability to maintain and increase user traffic;

Ÿ our ability to attract and retain advertisers;

Ÿ changes in government policies or regulations, or their enforcement;

Ÿ geopolitical events or natural disasters such as war, threat of war, earthquake or epidemics.

Our operating results tend to be seasonal. For instance, we may have slightly lower revenues during the first quarter of each year primarily due to the Chinese New Year holidays in that quarter. In addition, advertising spending in China has historically been cyclical, reflecting overall economic conditions as well as the budgeting and buying patterns of our customers.

We may not be able to manage our expansion effectively.

We have experienced rapid growth since we commenced our online video business in 2006. According to iResearch, the number of our monthly unique visitors from homes and offices increased from approximately 50 million in December 2007 to approximately 203 million in September 2010, and

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the number of monthly unique visitors from Internet cafes increased from approximately 36 million in December 2008 to approximately 61 million in August 2010. Our market share in terms of total user time spent viewing online videos in China increased from 36% in 2009 to 40% in the second quarter of 2010, according to iResearch, and the number of our brand advertisers increased from 7 in 2007 to 303 in 2009, and from 230 in the nine months ended September 30, 2009 to 343 in the nine months ended September 30, 2010. In addition, the number of our employees grew rapidly from 100 as of December 31, 2007 to 507 (exclusive of over 300 contract employees responsible for content screening and monitoring) as of September 30, 2010. To manage the further expansion of our business and the growth of our operations and personnel, we need to continuously expand and enhance our infrastructure and technology, and improve our operational and financial systems, procedures and controls. We also need to expand, train and manage our growing employee base. In addition, our management will be required to maintain and expand our relationships with content providers, advertisers, advertising agencies and other third parties. We cannot assure you that our current infrastructure, systems, procedures and controls will be adequate to support our expanding operations. If we fail to manage our expansion effectively, our business, results of operations and prospects may be materially and adversely affected.

Disruption or failure of our systems could impair our users’ online video experience and adversely affect our reputation.

Our ability to provide users with a high-quality online video experience depends on the continuous and reliable operation of our systems. We cannot assure you that we will be able to procure sufficient bandwidth in a timely manner or on acceptable terms or at all. Failure to do so may significantly impair user experience on our website and decrease the overall effectiveness of our website to both users and advertisers. Disruptions, failures, unscheduled service interruptions or a decrease in connection speeds could hurt our reputation and cause our users and advertisers to switch to our competitors’ websites. Our systems and proprietary CDN are vulnerable to damage or interruption as a result of fires, floods, earthquakes, power losses, telecommunications failures, undetected errors in software, computer viruses, hacking and other attempts to harm our systems. We have experienced service interruptions for up to three hours in the past which typically were caused by (i) overload of our servers; (ii) unexpected overflow of user traffic; and/or (iii) service malfunction of the telecommunications operators, such as power outage of Internet data centers or network transmission congestion. We may continue to experience similar interruptions in the future despite our continuous efforts to improve our systems. Since we host our servers at third-party Internet data centers, any natural disaster or unexpected closure of Internet data centers operated by third-party providers may result in lengthy service interruptions.

If we experience frequent or persistent service disruptions, whether caused by failures of our own systems or those of third-party service providers, our users’ experience with us may be negatively affected, which in turn, may have a material and adverse effect on our reputation. We cannot assure you that we will be successful in minimizing the frequency or duration of service interruptions.

Undetected programming errors could adversely affect our user experience and market acceptance of our video programs, which may materially and adversely affect our business and results of operations.

The video programs, including advertising video programs, on our website may contain programming errors that may only become apparent after their release. We receive user feedbacks in connection with programming errors affecting their user experience from time to time, and such errors may also come to our attention during our monitoring process. We generally have been able to resolve such programming errors in a timely manner. However, we cannot assure you that we will be able to detect and resolve all these programming errors effectively. Undetected audio or video programming

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errors or defects may adversely affect user experience and cause our advertisers to reduce their use of our services, any of which could materially and adversely affect our business and results of operations.

Our business, financial condition and results of operations may be adversely affected by the downturn in the global or Chinese economy.

The global financial markets have experienced significant disruptions since 2008 and the effect of the crisis persisted in 2009. China’s economy has also faced challenges. To the extent that there have been improvements in some areas, it is uncertain whether such recovery is sustainable. Since we derive substantially all of our revenues from online advertising in China and the advertising industry is particularly sensitive to economic downturns, our business and prospects may be affected by economic conditions in China. A slowdown in China’s economy may lead to a reduced amount of advertising activities, which could materially and adversely affect our financial condition and results of operations.

Moreover, a slowdown in the global or Chinese economy or the recurrence of any financial disruptions may have a material and adverse impact on financings available to us. The weakness in the economy could erode investors’ confidence, which constitutes the basis of the equity markets. The recent financial turmoil affecting the financial markets and banking system may significantly restrict our ability to obtain financing in the capital markets or from financial institutions on commercially reasonable terms, or at all. Although we are uncertain about the extent to which the recent global financial and economic crisis and slowdown of the Chinese economy may impact our business in the long term, there is a risk that our business, results of operations and prospects would be materially and adversely affected by the global economic downturn and the slowdown of the Chinese economy.

The continuing and collaborative efforts of our senior management and key employees are crucial to our success, and our business may be harmed if we were to lose their services.

Our success depends on the continuous efforts and services of Mr. Victor Koo, our founder, chairman and chief executive officer, and other members of our experienced senior management team, including Mr. Dele Liu, our director, chief financial officer and senior vice president, Mr. Leo Jian Yao, our chief technology officer, Mr. Frank Ming Wei, our senior vice president of operations, and Mr. Sunny Xiangyang Zhu, our chief content editor. We have not experienced attrition of our senior management team since we were established. If however, one or more of our executives or other key personnel are unable or unwilling to continue to provide services to us, we may not be able to find suitable replacements easily or at all. Competition for management and key personnel is intense and the pool of qualified candidates is limited. We may not be able to retain the services of our executives or key personnel, or attract and retain experienced executives or key personnel in the future. If any of our executive officers or key employees joins a competitor or forms a competing company, we may lose advertisers, know-how and key professionals and staff members. Each of our executive officers and key employees has entered into an employment agreement with us, which contains non-compete provisions. However, if any dispute arises between us and our executives or key employees, these agreements may not be enforceable in China, where these executives and key employees reside, in light of uncertainties with China’s legal system. See “—Risks Relating to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us.”

Our operations depend on the performance of the Internet infrastructure and telecommunications networks in China.

The successful operation of our business depends on the performance of the Internet infrastructure and telecommunications networks in China. Almost all access to the Internet is maintained through state-owned telecommunications operators under the administrative control and

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regulatory supervision of the MIIT. Moreover, we have entered into contracts with various subsidiaries of a limited number of telecommunications service providers in each province and rely on them to provide us with data communications capacity through local telecommunications lines and Internet data centers to host our servers. We have limited access to alternative networks or services in the event of disruptions, failures or other problems with China’s Internet infrastructure or the telecommunications networks provided by telecommunications service providers. Our Youku.com website regularly serves a large number of users and advertisers. With the expansion of our business, we may be required to upgrade our technology and infrastructure to keep up with the increasing traffic on our website. However, we have no control over the costs of the services provided by telecommunications service providers. If the prices we pay for telecommunications and Internet services rise significantly, our results of operations may be materially and adversely affected. If Internet access fees or other charges to Internet users increase, our user traffic may decline and our business may be harmed. Moreover, the agreements we have entered into with domestic telecommunications carriers to host our servers typically have terms of approximately one year and are renewable subject to early termination. If we are not able to renew such hosting services agreements with the telecommunications carriers when they expire and are not able to enter into agreements with alternative carriers at commercially reasonable terms or at all, the quality and stability of our services may be adversely affected.

We have granted, and may continue to grant, stock options under our stock option scheme, which may result in increased share-based compensation expenses.

We adopted a stock option scheme, or the Plan, on December 1, 2005, which was amended on March 26, 2007, June 20, 2008, December 16, 2009 and September 9, 2010. As of November 12, 2010, options to purchase a total of 139,520,233 ordinary shares of our company were outstanding. See “Management—2006 Stock Option Scheme” for detailed discussion. For the years ended December 31, 2007, 2008, 2009 and the nine months ended September 30, 2010, we recorded RMB1.2 million, RMB3.7 million, RMB4.6 million and RMB7.4 million (US$1.1 million), respectively, in share-based compensation expenses. We believe the granting of stock options is of significant importance to our ability to attract and retain key personnel and employees, and we will continue to grant stock options to employees in the future. As a result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results of operations.

In preparing our consolidated financial statements, we have identified material weaknesses and other control deficiencies in our internal control over financial reporting. If we fail to maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud, and investor confidence in our company and the market price of our ADSs may be adversely affected.

We will be subject to reporting obligations under the U.S. securities laws after this offering. Our reporting obligations as a public company will place a significant strain on our management, operational and financial resources and systems for the foreseeable future. Prior to this offering, we have been a private company and have had limited accounting personnel and other resources with which to address our internal control over financial reporting. In preparing our consolidated financial statements, we and our independent registered public accounting firm identified material weaknesses and other control deficiencies, each as defined in the standards established by U.S. Public Company Accounting Oversight Board, in our internal control over financial reporting as of December 31, 2009. As defined in the standards established by U.S. Public Company Accounting Oversight Board, a “material weakness” is a significant deficiency, or combination of significant deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

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The material weaknesses identified related to an insufficient number of financial reporting personnel with an appropriate level of knowledge, experience and training in the application of U.S. GAAP and SEC regulations in internal control over our financial reporting obligations, a lack of qualified staff to support our chief financial officer in financial reporting activities, a lack of an appropriate level of oversight, and communication of internal control, policies and procedures to support our activities, and a lack of effective monitoring activities to ensure the accuracy and completeness of our financial statements and related disclosures. Neither we nor our independent registered public accounting firm undertook a comprehensive assessment of our internal control for purposes of identifying and reporting material weaknesses and other control deficiencies in our internal control over financial reporting as we and they will be required to do once we become a public company. In light of the number of control deficiencies that were identified as a result of the limited procedures performed, we believe it is possible that, had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional control deficiencies may have been identified.

Following the identification of the material weaknesses and other control deficiencies, we have taken measures and plan to continue to take measures to remedy these deficiencies. However, the implementation of these measures may not fully address these deficiencies in our internal control over financial reporting, and we cannot conclude that they have been fully remedied. Our failure to correct these control deficiencies or our failure to discover and address any other control deficiencies could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our ADSs, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders our ability to prevent fraud.

Upon completion of this offering, we will become subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act, or Section 404, will require that we include a report from management on the effectiveness of our internal control over financial reporting in our annual report on Form 20-F beginning with our annual report for the fiscal year ending December 31, 2011. In addition, beginning at the same time, our independent registered public accounting firm must report on the effectiveness of our internal control over financial reporting. If we fail to remedy the material weaknesses identified above, our management and our independent registered public accounting firm may conclude that our internal control over financial reporting is not effective. This could adversely impact the market price of our ADSs due to a loss of investor confidence in the reliability of our reporting processes. We will need to incur costs and use management and other resources in order to comply with Section 404.

We have limited business insurance coverage.

Insurance companies in China currently do not offer as extensive an array of insurance products as insurance companies do in more developed economies. We do not have any business liability or disruption insurance to cover our operations. We have determined that the costs of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. Any uninsured occurrence of business disruption may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect on our results of operations and financial condition.

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Risks Related to Our Corporate Structure

If the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC governmental restrictions on foreign investment in Internet business, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.

Current PRC laws and regulations place certain restrictions on foreign ownership of companies that engage in Internet business, including the provision of online video and online advertising services. Specifically, foreign ownership in an Internet content provider or other value-added telecommunication service providers may not exceed 50%. We conduct our operations in China principally through contractual arrangements among our wholly-owned PRC subsidiary, 1Verge Internet and two consolidated affiliated entities in the PRC, namely, 1Verge Information and Jiaheyi, and their respective shareholders. 1Verge Information holds the licenses and permits necessary to conduct our online video, online advertising and related businesses in China. Our contractual arrangements with 1Verge Information and Jiaheyi and their respective shareholders enable us to exercise effective control over these entities and hence treat them as our consolidated affiliated entities and consolidate their results. For a detailed discussion of these contractual arrangements, see “Corporate Structure.”

We cannot assure you, however, that we will be able to enforce these contracts. Although we believe we are in compliance with current PRC regulations, we cannot assure you that the PRC government would agree that these contractual arrangements comply with PRC licensing, registration or other regulatory requirements, with existing policies or with requirements or policies that may be adopted in the future. PRC laws and regulations governing the validity of these contractual arrangements are uncertain and the relevant government authorities have broad discretion in interpreting these laws and regulations. If the PRC government determines that we do not comply with applicable laws and regulations, it could revoke our business and operating licenses, require us to discontinue or restrict our operations, restrict our right to collect revenues, block our website, require us to restructure our operations, impose additional conditions or requirements with which we may not be able to comply, or take other regulatory or enforcement actions against us that could be harmful to our business. The imposition of any of these penalties would result in a material and adverse effect on our ability to conduct our business.

We rely on contractual arrangements with our consolidated affiliated entities in China and their shareholders for our operations, which may not be as effective as direct ownership in providing operational control.

Since PRC laws restrict foreign equity ownership in companies engaged in online video and advertising businesses in China, we rely on contractual arrangements with our consolidated affiliated entities and their respective shareholders to operate our business in China. If we had direct ownership of 1Verge Information and Jiaheyi, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of 1Verge Information or Jiaheyi, which in turn could effect changes at the management level, subject to any applicable fiduciary obligations. However, under the current contractual arrangements, we rely on our consolidated affiliated entities and their respective shareholders’ performance of their contractual obligations to exercise effective control. In addition, our contractual arrangements generally have a term of ten years with an automatic extension of another ten years, which is subject to 1Verge Internet’s unilateral termination right. In general, neither our consolidated affiliated entities nor their respective shareholders may terminate the contracts prior to the expiration date. However, the shareholders of 1Verge Information or Jiaheyi may not act in the best interests of our company or may not perform their obligations under these contracts, including the obligation to renew these contracts when their initial ten-year term expires. Such risks exist throughout

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the period in which we intend to operate our business through the contractual arrangements with our consolidated affiliated entities. We may replace the shareholders of our consolidated affiliated entities at any time pursuant to our contractual arrangements with them and their shareholders. However, if any dispute relating to these contracts remains unresolved, we will have to enforce our rights under these contracts through the operations of PRC law and courts and therefore will be subject to uncertainties in the PRC legal system. See “—Any failure by our consolidated affiliated entities or their respective shareholders to perform their obligations under our contractual arrangements with them may have a material adverse effect on our business.” Therefore, these contractual arrangements may not be as effective as direct ownership in providing us with control over these consolidated affiliated entities.

Any failure by our consolidated affiliated entities or their respective shareholders to perform their obligations under our contractual arrangements with them may have a material adverse effect on our business.

Our consolidated affiliated entities and their respective shareholders may fail to take certain actions required for our business or follow our instructions despite their contractual obligations to do so. If they fail to perform their obligations under their respective agreements with us, we may have to rely on legal remedies under PRC law, including seeking specific performance or injunctive relief, which may not be effective.

Under the equity pledge agreements among 1Verge Internet and the respective shareholders of 1Verge Information and Jiaheyi, these shareholders pledged all of their equity interests in 1Verge Information and Jiaheyi to 1Verge Internet. Our PRC counsel, TransAsia Lawyers, has advised us that these pledges were duly created and effective given that such pledges have already been duly registered with the relevant local branch of the SAIC in accordance with the PRC Property Rights Law. As a result, if any of 1Verge Information, Jiaheyi or any of their respective shareholders breaches its obligations under the contractual arrangements, we may be able to successfully enforce the pledges.

All of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in certain other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements, which may make it difficult to exert effective control over our consolidated affiliated entities, and our ability to conduct our business may be adversely affected.

Contractual arrangements with our consolidated affiliated entities may result in adverse tax consequences to us.

Under applicable PRC tax laws and regulations, arrangements and transactions among related parties may be subject to audit or scrutiny by the PRC tax authorities within ten years after the taxable year when the arrangements or transactions are conducted. We could face material and adverse tax consequences if the PRC tax authorities were to determine that the contractual arrangements among 1Verge Internet, our wholly-owned subsidiary in China, our consolidated affiliated entities in China and their respective shareholders were not entered into on an arm’s-length basis and therefore constituted unfavorable transfer pricing arrangements. Unfavorable transfer pricing arrangements could, among other things, result in an upward adjustment on taxation. In addition, the PRC tax authorities may impose interest on late payments on our consolidated affiliated entities for the adjusted but unpaid taxes. Our results of operations may be materially and adversely affected if our consolidated affiliated entities’ tax liabilities increase significantly or if they are required to pay interest on late payments.

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The shareholder of our consolidated affiliated entities may have potential conflicts of interest with us, which may materially and adversely affect our business.

Ms. Qiong Qin and Mr. Dele Liu are shareholders of the consolidated affiliated entities. Ms. Qin is the wife of our founder and chief executive officer, and she does not have any equity interest or management position at our company. Mr. Liu is our director, chief financial officer and senior vice president. We provide no incentives to Ms. Qin and Mr. Liu for the purpose of encouraging them to act in our best interests in their capacity as the shareholders of our consolidated affiliated entities. We may replace Ms. Qin and Mr. Liu as the shareholders of our consolidated affiliated entities at any time pursuant to the amended and restated equity option agreements. As a director and executive officer of our company, Mr. Liu has a duty of loyalty and care to us under Cayman Islands law. In addition, each of Ms. Qin and Mr. Liu has executed a power of attorney to appoint Mr. Victor Koo, the person designated by 1Verge Internet and the founder of our company, to vote on her/his behalf and exercise the full voting rights as the shareholder of the consolidated affiliated entities. We are not aware that other publicly listed companies with a similar corporate and ownership structure as ours have brought conflicts of interests claims against the shareholders of their respective consolidated affiliated entities. However, we cannot assure you that when conflicts arise, Ms. Qin and Mr. Liu will act in the best interests of our company or that conflicts will be resolved in our favor. If we cannot resolve any conflicts of interest or disputes between us and Ms. Qin and Mr. Liu, we would have to rely on legal proceedings, which may be expensive, time-consuming and disruptive to our operations. There is also substantial uncertainty as to the outcome of any such legal proceedings.

We may rely principally on dividends and other distributions on equity paid by our PRC and Hong Kong subsidiaries to fund any cash and financing requirements we may have. Any limitation on the ability of our PRC and Hong Kong subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business.

We are a holding company, and we rely principally on dividends and other distributions on equity paid by our wholly-owned PRC subsidiary, 1Verge Internet, and our wholly-owned Hong Kong subsidiary, Jet Brilliant, which is the direct holding company of Jet Brilliant Beijing, for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. If 1Verge Internet or Jet Brilliant, as the case may be, incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us. In addition, the PRC tax authorities may require us to adjust our taxable income under the contractual arrangements 1Verge Internet currently has in place with our consolidated affiliated entities in a manner that would materially and adversely affect its ability to pay dividends and other distributions to us.

Under PRC laws and regulations, 1Verge Internet and Jet Brilliant Beijing, as wholly foreign-owned enterprises in the PRC, may pay dividends only out of their accumulated profits as determined in accordance with PRC accounting standards and regulations. In addition, wholly foreign-owned enterprises such as 1Verge Internet and Jet Brilliant Beijing are required to set aside at least 10% of their accumulated after-tax profits each year, if any, to fund certain statutory reserve funds, until the aggregate amount of such a fund reaches 50% of their respective registered capital. At their discretion, they may allocate a portion of their after-tax profits based on PRC accounting standards to staff welfare and bonus funds. These reserve funds and staff welfare and bonus funds are not distributable as cash dividends. As of September 30, 2010, the registered capital of 1Verge Internet and Jet Brilliant Beijing was US$95,200,000 and RMB1,000,000, respectively. 1Verge Internet and Jet Brilliant Beijing have not made any profits to date. Thus, they have not been subject to the statutory reserve fund requirements and have not set aside any money to fund the statutory reserve funds or staff welfare and bonus funds. Our PRC subsidiaries have not and will not be able to pay dividends to our offshore entities until they generate accumulated profits and meet the requirements for statutory reserve funds. As of September 30, 2010,

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our PRC subsidiaries had accumulated deficits of approximately RMB109 million (US$16.3 million) in accordance with PRC accounting standards and regulations. Substantially all of their revenues have been used to fund our business operations or expansion.

Any limitation on the ability of 1Verge Internet or Jet Brilliant Beijing to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business. See also “—Risks Related to Doing Business in China—Our global income and the dividends that we may receive from our PRC subsidiaries may be subject to PRC taxes under the PRC Enterprise Income Tax Law, which would have a material adverse effect on our results of operations.”

PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may limit our use of the proceeds we receive from this offering to fund our expansion or operations.

In utilizing the proceeds we receive from this offering in the manner described in “Use of Proceeds,” as an offshore holding company with PRC subsidiaries, we may (i) make additional capital contributions to our PRC subsidiaries, (ii) establish new PRC subsidiaries and make capital contributions to these new PRC subsidiaries, (iii) make loans to our PRC subsidiaries or consolidated affiliated entities, or (iv) acquire offshore entities with business operations in China in an offshore transaction. However, most of these uses are subject to PRC regulations and approvals. For example:

Ÿ capital contributions to our PRC subsidiaries, whether existing ones or newly established ones, must be approved by the PRC Ministry of Commerce or its local counterparts;

Ÿ loans by us to our PRC subsidiaries, each of which is a foreign-invested enterprise, to finance their activities cannot exceed statutory limits and must be registered with the PRC State Administration of Foreign Exchange, or SAFE, or its local branches; and

Ÿ loans by us to our consolidated affiliated entities, which are domestic PRC entities, must be approved by the National Development and Reform Commission and must also be registered with SAFE or its local branches.

On August 29, 2008, SAFE promulgated the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign Invested Enterprises, or SAFE Circular 142, regulating the conversion by a foreign-invested enterprise of foreign currency registered capital into Renminbi by restricting how the converted Renminbi may be used. SAFE Circular 142 provides that the Renminbi capital converted from foreign currency registered capital of a foreign-invested enterprise may only be used for purposes within the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC, unless it is provided for otherwise. In addition, SAFE strengthened its oversight of the flow and use of the Renminbi capital converted from foreign currency registered capital of a foreign-invested company. The use of such Renminbi capital may not be altered without SAFE approval, and such Renminbi capital may not in any case be used to repay Renminbi loans if the proceeds of such loans have not been used. Violations of SAFE Circular 142 could result in severe monetary or other penalties. We expect that if we convert the net proceeds we receive from this offering into Renminbi pursuant to SAFE Circular 142, our use of Renminbi funds will be for purposes within the approved business scope of our PRC subsidiaries. Such business scope includes “technical services,” which we believe permits our PRC subsidiaries to purchase or lease servers and other equipment for their own technical data and research and to provide operational support to our consolidated affiliated entities. However, we may not be able to use such Renminbi funds to make equity investments in the PRC through our PRC subsidiaries.

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We expect that the PRC regulations of loans and direct investment by offshore holding companies to PRC entities may continue to limit our use of the proceeds we receive from this offering. There are no costs associated with registering loans or capital contributions with relevant PRC governmental authorities, other than nominal processing charges. Under the relevant PRC laws and regulations, the PRC governmental authorities are required to process such approvals or registrations or deny our application within a prescribed time period, which is usually less than 90 days. The actual time taken, however, may be longer due to administrative delays. We cannot assure you that we will be able to obtain these government registrations or approvals on a timely basis, if at all, with respect to our future plans to use the U.S. dollar proceeds we receive from this offering for our expansion and operations in China. If we fail to receive such registrations or approvals, our ability to use the proceeds of this offering and to capitalize our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and ability to fund and expand our business.

We may be unable to collect long-term loans extended to the shareholders of our consolidated affiliated entities.

As of September 30, 2010, we made long-term interest-free loans in an aggregate principal amount of RMB20.1 million (US$2.9 million) to the shareholders of our consolidated affiliated entities to enable them to fund the initial capitalization and the subsequent financial requirements of our consolidated affiliated entities. The initial term for such loans is ten years and will be automatically extended for another ten years unless we give a three-month written notice prior to the expiration of the initial term. We may in the future make additional loans to the shareholders of our consolidated affiliated entities in China in connection with any increase in the capitalization or financial requirements of these entities to the extent necessary and permissible under applicable PRC laws and regulations. Our ability to collect these long-term loans will depend on the profitability and results of operations of these consolidated affiliated entities, which is uncertain.

Risks Related to Doing Business in China

Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations.

Substantially all of our assets and operations are located in China. Accordingly, our business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic and social conditions in China generally and by continued economic growth in China as a whole.

The Chinese economy differs from the economies of most developed countries in many respects, including the level of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the government. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese government also exercises significant control over China’s economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or companies.

While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may be

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adversely affected by government control over capital investments or changes in tax regulations. In addition, in the past the Chinese government has implemented certain measures, including interest rate increases, to control the pace of economic growth. These measures may cause decreased economic activity in China, which may adversely affect our business and operating results.

Uncertainties with respect to the PRC legal system could adversely affect us.

We conduct our business primarily through our PRC subsidiaries and consolidated affiliated entities in China. Our operations in China are governed by PRC laws and regulations. Our PRC subsidiaries are foreign-invested enterprises and are subject to laws and regulations applicable to foreign investment in China and, in particular, laws applicable to foreign-invested enterprises. The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value.

In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past three decades has significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual or tort rights. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us.

Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all and may have a retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until some time after the violation. In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention.

We believe that trademarks, trade secrets, copyright, and other intellectual property we use are important to our business. We rely on a combination of trademark, copyright and trade secret protection laws in China and other jurisdictions, as well as confidentiality procedures and contractual provisions to protect our intellectual property and our brand. Protection of intellectual property rights in China may not be as effective as in the United States or other jurisdictions, and as a result, we may not be able to adequately protect our intellectual property rights, which could adversely affect our revenues and competitive position.

We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of Internet business and companies.

The PRC government extensively regulates the Internet industry, including foreign ownership of, and the licensing and permit requirements pertaining to, companies in the Internet industry. These Internet-related laws and regulations are relatively new and evolving, and their interpretation and enforcement involve significant uncertainty. As a result, in certain circumstances it may be difficult to determine what actions or omissions may be deemed to be in violations of applicable laws and regulations. Issues, risks and uncertainties relating to PRC regulation of the Internet business include, but are not limited to, the following:

Ÿ We only have contractual control over our website.    We do not own the website due to the restriction of foreign investment in businesses providing value-added telecommunication

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services in China, including Internet content provision services. This may significantly disrupt our business, subject us to sanctions, compromise enforceability of related contractual arrangements, or have other harmful effects on us.

Ÿ There are uncertainties relating to the regulation of the Internet business in China, including evolving licensing practices. This means that permits, licenses or operations at some of our companies may be subject to challenge, or we may fail to obtain permits or licenses that may be deemed necessary for our operations or we may not be able to obtain or renew certain permits or licenses. The major permits and licenses that could be involved include, without limitation, the Internet Audio/Video Program Transmission License (including ancillary licenses covering services of live broadcasting on general social and cultural activities, sports games or other similar activities, search functionality for services of online audio/video programs and services of distribution of audio/video programs to mobile phones) issued by the SARFT, the Internet Culture Operation Permit issued by the Ministry of Culture, the Value-Added Telecommunications Services Operation Permit issued by the MIIT, the Telecommunications and Information Services Operation Permit issued by the Beijing Communications Administration, the Internet News Information Services License issued by the SCIO, the Internet Medical Information Services License issued by the State Food and Drug Administration and the Internet Publication License issued by the GAPP. If we fail to maintain any of these required licenses or approvals, we may be subject to various penalties, including fines and the discontinuation of or restriction on our operations. Any such disruption in our business operations may have a material and adverse effect on our results of operations.

Ÿ New laws and regulations may be promulgated that will regulate Internet activities, including online video and online advertising businesses. If these new laws and regulations are promulgated, additional licenses may be required for our operations. If our operations do not comply with these new regulations after they become effective, or if we fail to obtain any licenses required under these new laws and regulations, we could be subject to penalties.

On July 13, 2006, the MIIT, the predecessor of which is the Ministry of Information Industry, issued the Notice of the Ministry of Information Industry on Intensifying the Administration of Foreign Investment in Value-added Telecommunications Services. This notice prohibits domestic telecommunications services providers from leasing, transferring or selling telecommunications business operating licenses to any foreign investor in any form, or providing any resources, sites or facilities to any foreign investor for their illegal operation of a telecommunications business in China. According to this notice, either the holder of a value-added telecommunications business operating license or its shareholders must directly own the domain names and trademarks used by such license holders in their provision of value-added telecommunications services. The notice also requires each license holder to have the necessary facilities, including servers, for its approved business operations and to maintain such facilities in the regions covered by its license. Currently, all contracts with telecommunications carriers and other service providers to host the servers used in our business were entered into by 1Verge Information, our PRC consolidated affiliated entity, and such arrangements are in compliance with the notice. 1Verge Information also owns the related domain names and holds the ICP license necessary to conduct our operations in China, while the related trademarks are owned by 1Verge Internet, our wholly-owned subsidiary. There remain significant uncertainties with respect to the procedural requirements involved in effecting the transfer of trademarks from 1Verge Internet to our consolidated affiliated entity, 1Verge Information. It is also unclear as to which of the trademarks that 1Verge Internet owns, if not all, will be subject to the transfer requirement under the Notice. To our knowledge, in practice, the notice has not been enforced in respect of trademarks. We have not been required by the MIIT or its local branch to transfer the relevant trademarks held by 1Verge Internet to 1Verge Information. If the relevant government authority strictly enforces the notice, we will be required to transfer the related trademarks to 1Verge Information, which may be time consuming. If we fail to do

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so, the relevant governmental authority has the discretion to revoke 1Verge Information’s value-added telecommunications license or impose other penalties, including fines.

The interpretation and application of existing PRC laws, regulations and policies and possible new laws, regulations or policies relating to the Internet industry have created substantial uncertainties regarding the legality of existing and future foreign investments in, and the businesses and activities of, Internet businesses in China, including our business. We cannot assure you that we have obtained all the permits or licenses required for conducting our business in China or will be able to maintain our existing licenses or obtain any new licenses required under any new laws or regulations. There are also risks that we may be found to violate the existing or future laws and regulations given the uncertainty and complexity of China’s regulation of Internet business.

Fluctuations in exchange rates may have a material adverse effect on your investment.

The value of the Renminbi against the U.S. dollar and other currencies is affected by, among other things, changes in China’s political and economic conditions and China’s foreign exchange policies. The conversion of Renminbi into foreign currencies, including U.S. dollars, has been based on exchange rates set by the People’s Bank of China. On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the Renminbi solely to the U.S. dollar. Under this revised policy, the Renminbi is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. Following the removal of the U.S. dollar peg, the Renminbi appreciated more than 20% against the U.S. dollar over the following three years. Since July 2008, however, the Renminbi has traded within a narrow range against the U.S. dollar. As a consequence, the Renminbi has fluctuated significantly since July 2008 against other freely traded currencies, in tandem with the U.S. dollar. On June 20, 2010, the People’s Bank of China announced that the PRC government would further reform the Renminbi exchange rate regime and increase the flexibility of the exchange rate. It is difficult to predict how this new policy may impact the Renminbi exchange rate.

Substantially all of our revenues and costs are denominated in Renminbi. At the Cayman Islands holding company level, we rely entirely on dividends and other fees paid to us by our subsidiary and consolidated affiliated entities in China. Any significant revaluation of the Renminbi may materially and adversely affect our cash flows, net revenues, earnings and financial position, and the value of, and any dividends payable on, our ADSs in U.S. dollars. For example, an appreciation of the Renminbi against the U.S. dollar would make any new Renminbi-denominated investments or expenditures more costly to us, to the extent that we need to convert U.S. dollars into Renminbi for such purposes. Conversely, a significant depreciation of the Renminbi against the U.S. dollar may significantly reduce the U.S. dollar equivalent of our earnings, which in turn could adversely affect the price of our ADSs.

Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert Renminbi into foreign currency. As a result, fluctuations in exchange rates may have a material adverse effect on your investment.

Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.

The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenues in Renminbi. Under our current corporate structure, our Cayman Islands holding

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company primarily relies on dividend payments from our wholly-owned PRC subsidiary, 1Verge Internet, and our wholly-owned Hong Kong subsidiary, Jet Brilliant, which is the direct holding company of Jet Brilliant Beijing, to fund any cash and financing requirements we may have. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval by complying with certain procedural requirements. However, approval from or registration with appropriate government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of our subsidiaries in China may be used to pay dividends by our PRC subsidiaries to our company either directly or through Jet Brilliant and pay employees of our PRC subsidiaries who are located outside China in a currency other than the Renminbi. With prior approval from SAFE, cash generated from the operations of our PRC subsidiaries and affiliated entities may be used to pay off debt in a currency other than the Renminbi owed by our subsidiaries and affiliated entities to entities outside China, and make other capital expenditures outside China in a currency other than the Renminbi. If either or both of our consolidated affiliated entities liquidate, the proceeds from the liquidation of their assets may be used outside of the PRC or be given to investors who are not PRC nationals. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our ADSs.

The approval of the China Securities Regulatory Commission may be required in connection with this offering under a regulation adopted in August 2006, and, if required, we cannot assure you that we will be able to obtain such approval.

On August 8, 2006, six PRC regulatory agencies, including the China Securities Regulatory Commission, or CSRC, promulgated the Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, which became effective on September 8, 2006 and was amended on June 22, 2009. This regulation, among other things, requires offshore special purpose vehicles, or SPVs, formed for the purpose of an overseas listing and controlled by PRC companies or individuals, to obtain CSRC approval prior to listing their securities on an overseas stock exchange. The application of this regulation remains unclear. Our PRC counsel, TransAsia Lawyers, has advised us that, based on their understanding of the current PRC laws, rules and regulations:

Ÿ CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like ours under this prospectus are subject to this regulation; and

Ÿ given that 1Verge Information and 1Verge Internet were established before September 8, 2006, the effective date of this regulation, and that no provision in this regulation clearly classified contractual arrangements as a type of transaction subject to its regulation, we are not required to submit an application to CSRC for its approval of the listing and trading of our ADSs on the NYSE.

Because there has been no official interpretation or clarification of this regulation since its adoption, there is uncertainty as to how this regulation will be interpreted or implemented. If it is determined that the CSRC approval is required for this offering, we may face sanctions by CSRC or other PRC regulatory agencies for failure to seek the CSRC approval for this offering. These sanctions may include fines and penalties on our operations in the PRC (although to our knowledge, no definitive rules or interpretations have been issued to determine or quantify such fines or penalties), delays or restrictions on the repatriation of the proceeds from this offering into the PRC, restrictions on or prohibition of the payments or remittance of dividends by our PRC subsidiaries, or other actions that

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may have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs. CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable to us, to halt this offering before the settlement and delivery of the ADSs that we are offering. Consequently, if you engage in market trading or other activities in anticipation of and prior to the settlement and delivery of the ADSs we are offering, you would be doing so at the risk that the settlement and delivery may not occur.

Recently enacted regulations in the PRC may make it more difficult for us to pursue growth through acquisitions.

Among other things, the regulation discussed in the preceding risk factor established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex. Such regulation requires, among other things, that the Ministry of Commerce be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise or a foreign company with substantial PRC operations, if certain thresholds under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, issued by the State Council on August 3, 2008, were triggered.

We may grow our business in part by directly acquiring complementary businesses in China. Complying with the requirements of these regulations to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from the Ministry of Commerce, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.

PRC regulations relating to the establishment of offshore SPVs by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.

SAFE has promulgated several regulations, including the Notice on Issues Relating to the Administration of Foreign Exchange in Fund-Raising and Round-trip Investment Activities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Circular No. 75, effective on November 1, 2005, and the Notice of the General Affairs Department of the State Administration of Foreign Exchange on Printing and Distributing the Implementing Rules for the Notice on Issues Relating to the Administration of Foreign Exchange in Fund-Raising and Round-trip Investment Activities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Circular No. 106, issued on May 29, 2007. These regulations require PRC residents and PRC corporate entities to register with local branches of SAFE in connection with their direct or indirect offshore investment activities. These regulations apply to our shareholders who are PRC residents and may apply to any offshore acquisitions that we make in the future.

Under these foreign exchange regulations, PRC residents who make, or have previously made prior to the implementation of these foreign exchange regulations, direct or indirect investments in SPVs will be required to register those investments. In addition, any PRC resident who is a direct or indirect shareholder of a special purpose vehicle, or an SPV, is required to update the previously filed registration with the local branch of SAFE, with respect to that SPV, to reflect any material change. Moreover, the PRC subsidiaries of that SPV are required to urge the PRC resident shareholders to update their registration with the local branch of SAFE. If any PRC shareholder fails to make the required registration or update the previously filed registration, the PRC subsidiaries of that SPV may be prohibited from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to their SPV parent, and the SPV may also be prohibited from injecting additional capital into its PRC subsidiaries. Moreover, failure to comply with the various foreign exchange

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registration requirements described above could result in liabilities for such PRC subsidiaries under PRC laws for evasion of applicable foreign exchange restrictions, including (i) the requirement by SAFE to return the foreign exchange remitted overseas within a period specified by SAFE, with a fine of up to 30% of the total amount of foreign exchange remitted overseas and deemed to have been evasive and (ii) in circumstances involving serious violations, a fine of no less than 30% of and up to the total amount of remitted foreign exchange deemed evasive. Furthermore, the persons-in-charge and other persons at such PRC subsidiaries who are held directly liable for the violations may be subject to administrative sanctions.

These foreign exchange regulations provide that PRC residents include both PRC citizens, meaning any individual who holds a PRC passport or resident identification card, and individuals who are non-PRC citizens but primarily reside in the PRC due to their economic ties to China. SAFE Circular No. 106 further defines individuals who are non-PRC citizens but primarily reside in the PRC due to their economic ties to the PRC.

The shareholders of our consolidated affiliated entities, Ms. Qiong Qin and Mr. Dele Liu, both of whom are PRC citizens, have not conducted any direct or indirect offshore investment activities or held any shares, directly or indirectly in any of our offshore entities. Therefore, these PRC resident shareholders are not required to file the registrations and amendments pursuant to SAFE Circular No. 75 and related rules. Mr. Victor Koo, our founder and chief executive officer, who is a permanent resident of Hong Kong, stays in mainland China for over 183 days per annum. However, as a result of our inquiries with the competent local branch of SAFE responsible for our PRC subsidiaries’ foreign exchange registrations, we were informed that, given the lack of any publicly-available implementing rules or official interpretations issued by the SAFE regarding the issue of whether the registration and amendment filing requirements under SAFE Circular No. 75 and related rules should apply to non-PRC citizens, Mr. Koo should not be deemed a PRC resident for these purposes, and any attempt to submit an application to such local SAFE branch with respect to Mr. Koo’s investment and shareholdings in our offshore SPV will not be officially accepted or examined. In addition, Ms. Qiong Qin should not be required to make an application with respect to Mr. Koo’s offshore SPV activities merely by virtue of being Mr. Koo’s wife.

However, we cannot conclude that the SAFE or the local branch responsible for our PRC subsidiaries’ foreign exchange registrations will not later alter their position on and interpretation of the applicability of these foreign exchange regulations to Mr. Koo or the PRC resident shareholders of our consolidated affiliated entities. In the event that the registration procedures set forth in these foreign exchange regulations become applicable to Mr. Koo or the PRC resident shareholders of our consolidated affiliated entities, we will urge these individuals to, and they will, file necessary registrations and amendments as required under SAFE Circular No. 75 and related rules. However, as SAFE regulations and policies have been evolving rapidly in the past few years, we cannot assure that all of these individuals can successfully make or update any applicable registration or obtain the necessary approval required by these foreign exchange regulations as these individuals may not be able to fully satisfy the new requirements or interpretations that SAFE or its local branch may impose or adopt from time to time. The failure or inability of such individuals to comply with the registration procedures set forth in these regulations may subject us to fines or legal sanctions, restrictions on our cross-border investment activities or our PRC subsidiary’s ability to distribute dividends to, or obtain foreign-exchange-dominated loans from, our company, or prevent us from making distributions or paying dividends. As a result, our business operations and our ability to make distributions to you could be materially and adversely affected.

Furthermore, as these foreign exchange regulations are still relatively new and there is uncertainty concerning the reconciliation of the new regulations with the approval requirements under other existing PRC laws and regulations, such as tax laws, it is unclear how these regulations, and any

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future regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant government authorities. We cannot predict how these regulations will affect our business operations or future strategy. For example, we may be subject to a more stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect our financial condition and results of operations. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects.

Failure to comply with PRC regulations regarding the registration requirements for employee stock ownership plans or share option plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.

In December 2006, the People’s Bank of China promulgated the Administrative Measures of Foreign Exchange Matters for Individuals, which set forth the respective requirements for foreign exchange transactions by individuals (both PRC or non-PRC citizens) under either the current account or the capital account. In January 2007, SAFE issued implementing rules for the Administrative Measures of Foreign Exchange Matters for Individual, which, among other things, specified approval requirements for certain capital account transactions such as a PRC citizen’s participation in the employee stock ownership plans or stock option plans of an overseas publicly-listed company. In March 2007, SAFE promulgated the Application Procedures of Foreign Exchange Administration for Domestic Individuals Participating in Employee Stock Ownership Plan or Stock Option Plan of Overseas-Listed Company, or the Stock Option Rules. Under these rules, PRC citizens who participate in an employee stock ownership plan or a stock option plan in an overseas publicly-listed company are required to register with SAFE and complete certain other procedures. For participants of an employee stock ownership plan, an overseas custodian bank should be retained by the PRC agent, which could be the PRC subsidiary of such overseas publicly-listed company, to hold on trusteeship all overseas assets held by such participants under the employee share ownership plan. In the case of a stock option plan, the PRC agent is required to retain a financial institution with stock brokerage qualification at the place where the overseas publicly-listed company is listed or a qualified institution designated by the overseas publicly-listed company to handle matters in connection with the exercise or sale of stock options for the stock option plan participants. For participants who had already participated in an employee stock ownership plan or stock option plan before the date of the Stock Option Rules, the Stock Option Rules require their PRC employers or PRC agents to complete the relevant formalities within three months of the date of this rule. We and our PRC citizen employees who participate in an employee stock ownership plan or a stock option plan will be subject to these regulations when our company becomes a publicly-listed company in the United States. If we or our PRC optionees fail to comply with these regulations, we or our PRC optionees may be subject to fines and other legal or administrative sanctions. See “Regulation—Regulations on Employee Stock Options Plan.”

We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.

Pursuant to the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises, or SAT Circular 698, issued by the State Administration of Taxation, or the SAT, on December 10, 2009 with retroactive effect from January 1, 2008, where a non-resident enterprise transfers the equity interests of a PRC resident enterprise indirectly by disposition of the equity interests of an overseas holding company, or an Indirect Transfer, and such overseas holding company is located in a tax jurisdiction that: (i) has an effective tax rate less than 12.5% or (ii) does not tax foreign income of its residents, the non-resident enterprise, being the

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transferor, shall report to the competent tax authority of the PRC resident enterprise this Indirect Transfer. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC withholding tax at a rate of up to 10%. SAT Circular 698 also provides that, where a non-PRC resident enterprise transfers its equity interests in a PRC resident enterprise to its related parties at a price lower than the fair market value, the relevant tax authority has the power to make a reasonable adjustment to the taxable income of the transaction.

There is uncertainty as to the application of SAT Circular 698. For example, while the term “Indirect Transfer” is not clearly defined, it is understood that the relevant PRC tax authorities have jurisdiction regarding requests for information over a wide range of foreign entities having no direct contact with China. Moreover, the relevant authority has not yet promulgated any formal provisions or formally declared or stated how to calculate the effective tax rates in foreign tax jurisdictions, and the process and format of the reporting of an Indirect Transfer to the competent tax authority of the relevant PRC resident enterprise remain unclear. In addition, there are not any formal declarations with regard to how to determine whether a foreign investor has adopted an abusive arrangement in order to reduce, avoid or defer PRC tax. SAT Circular 698 may be determined by the tax authorities to be applicable to our private equity financing transactions where non-resident investors were involved, if any of such transactions were determined by the tax authorities to lack reasonable commercial purpose. As a result, we and our non-resident investors may become at risk of being taxed under SAT Circular 698 and may be required to expend valuable resources to comply with SAT Circular 698 or to establish that we should not be taxed under SAT Circular 698, which may have a material adverse effect on our financial condition and results of operations or such non-resident investors’ investments in us.

Discontinuation of any of the preferential tax treatments or imposition of any additional taxes could adversely affect our financial condition and results of operations.

China passed a new PRC Enterprise Income Tax Law, or the New EIT Law, and its implementation rules, both of which became effective on January 1, 2008. The New EIT Law significantly curtails tax incentives granted to foreign-invested enterprises under the PRC Enterprise Income Tax Law concerning Foreign-Invested Enterprises and Foreign Enterprises, or the Old EIT Law, which was effective prior to January 1, 2008. The New EIT Law, however, (i) reduces the statutory rate of the enterprise income tax from 33% to 25%, (ii) permits companies established before March 16, 2007 to continue to enjoy their existing tax incentives, adjusted by certain transitional phase-out rules promulgated by the State Council on December 26, 2007, and (iii) introduces new tax incentives, subject to various qualification criteria.

The New EIT Law and its implementation rules permit certain “high and new technology enterprises strongly supported by the state” which hold independent ownership of core intellectual property to enjoy a preferential enterprise income tax rate of 15% subject to certain new qualification criteria. 1Verge Information, our consolidated affiliated entity, was recognized by the Beijing Municipal Science and Technology Commission as a “high and new technology enterprise” on April 27, 2006 and was reaffirmed on December 14, 2009, and therefore was eligible for the reduced 15% enterprise income tax rate upon its filing with the relevant tax authority. The qualification as a “high and new technology enterprise” is subject to annual evaluation and a three-year review by the relevant authorities in China. If 1Verge Information fails to maintain its “high and new technology enterprise” qualification or renew its qualification when the relevant term expires, its applicable enterprise income tax rate may increase to 25%, which could have a material adverse effect on our financial condition and results of operations.

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Preferential tax treatment granted to our subsidiaries and consolidated affiliated entities by the local governmental authorities is subject to review and may be adjusted or revoked at any time. The discontinuation of any preferential tax treatments currently available to us and our wholly-owned PRC subsidiary will cause our effective tax rate to increase, which could have a material adverse effect on our financial condition and results of operations. We cannot assure you that we will be able to maintain our current effective tax rate in the future.

Our global income and the dividends that we may receive from our PRC subsidiaries may be subject to PRC taxes under the PRC Enterprise Income Tax Law, which would have a material adverse effect on our results of operations.

Under the New EIT Law and its implementation rules, both became effective on January 1, 2008, an enterprise established outside of the PRC with “de facto management body” within the PRC is considered a resident enterprise and will be subject to the enterprise income tax at the rate of 25% on its global income. The implementation rules define the term “de facto management body” as “establishments that carry out substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc. of an enterprise.” The State Tax Administration issued the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies, or SAT Circular 82, on April 22, 2009. SAT Circular 82 provides certain specific criteria for determining whether the “de facto management body” of a Chinese-controlled offshore-incorporated enterprise is located in China. See “Regulation—Regulations on Tax—PRC Enterprise Income Tax.” Although SAT Circular 82 only applies to offshore enterprises controlled by PRC enterprises, not those controlled by PRC individuals, the determining criteria set forth in the SAT Circular 82 may reflect the State Administration of Taxation’s general position on how the “de facto management body” test may be applied in determining the tax resident status of offshore enterprises.

According to the SAT Circular 82, a Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following conditions set forth in the SAT Circular 82 are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.

We do not believe that either Youku.com Inc. or its Hong Kong subsidiary, Jet Brilliant, meets all of the conditions above. Each of Youku.com Inc. and Jet Brilliant is a company incorporated outside the PRC. As holding companies, these two entities’ key assets and records, including the resolutions of their respective board of directors and the resolutions of their respective shareholders, are located and maintained outside the PRC. In addition, we are not aware of any offshore holding companies with a similar corporate structure as ours ever having been deemed a PRC “resident enterprise” by the PRC tax authorities. Therefore, we believe that neither Youku.com Inc. nor Jet Brilliant should be treated as a “resident enterprise” for PRC tax purposes if the criteria for “de facto management body” as set forth in the SAT Circular 82 were deemed applicable to us. However, as the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body” as applicable to our offshore entities, we may be considered a resident enterprise and may therefore be subject to the enterprise income tax at 25% on our global income. If we are considered a resident enterprise and earn income other than dividends from our PRC subsidiary, a 25% enterprise income tax on our global income could significantly increase our tax burden and materially and adversely affect our cash flow and profitability.

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In addition to the uncertainty regarding how the new “resident enterprise” classification may apply, it is also possible that the rules may change in the future, possibly with retroactive effect.

Under the Old EIT Law applicable to us prior to January 1, 2008, dividend payments to foreign investors made by foreign-invested enterprises in China, such as 1Verge Internet and Jet Brilliant Beijing, were exempt from PRC withholding tax. Pursuant to the New EIT Law and its implementation rules, however, dividends generated after January 1, 2008 and payable by a foreign-invested enterprise in China to its foreign investors, which are non-PRC tax resident enterprises without an establishment in China, or whose income has no connection with their institutions and establishments inside China, are subject to withholding tax at a rate of 10%, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. We are a Cayman Islands holding company and we plan to conduct our advertising business and derive substantially all of our income from dividends through Jet Brilliant Beijing, which is 100% owned by Jet Brilliant, our wholly owned subsidiary located in Hong Kong. As long as our Hong Kong subsidiary is considered a non-PRC resident enterprise and holds at least 25% of the equity interest of Jet Brilliant Beijing, dividends that it receives from Jet Brilliant Beijing may be subject to withholding tax at a preferential rate of 5% under the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion, effective on January 1, 2007, upon receiving approval from the local tax authority. However, if our Hong Kong subsidiary is not considered to be the beneficial owner of such dividends under applicable tax regulations, such dividends would be subject to withholding tax at a rate of 10%. See “Regulation—Regulations on Tax—Dividends Withholding Tax.” Our PRC subsidiaries have not paid any dividends, and do not currently plan to pay dividends in the future as they continue to incur losses, to our company or our Hong Kong subsidiary, as the case the may be. We have not obtained the approval mentioned above from the local tax authority and do not currently plan to do so in the near future.

We have been advised by our PRC counsel, TransAsia Lawyers, that because there remains uncertainty regarding the interpretation and implementation of the New EIT Law and its implementation rules, it is uncertain whether, if we are regarded as a PRC resident enterprise, any dividends to be distributed by us to our non-PRC shareholders and ADS holders would be subject to any PRC withholding tax. If we are required under the New EIT Law to withhold PRC income tax on our dividends payable to our non-PRC enterprise shareholders and ADS holders, your investment in our ordinary shares or ADSs may be materially and adversely affected.

The enforcement of the Labor Contract Law and other labor-related regulations in the PRC may adversely affect our business and our results of operations.

On June 29, 2007, the Standing Committee of the National People’s Congress of China enacted the Labor Contract Law, which became effective on January 1, 2008. The Labor Contract Law introduces specific provisions related to fixed-term employment contracts, part-time employment, probation, consultation with labor union and employee assemblies, employment without a written contract, dismissal of employees, severance, and collective bargaining, which together represent enhanced enforcement of labor laws and regulations. According to the Labor Contract Law, an employer is obliged to sign an unlimited-term labor contract with any employee who has worked for the employer for ten consecutive years. Further, if an employee requests or agrees to renew a fixed-term labor contract that has already been entered into twice consecutively, the resulting contract must have an unlimited term, with certain exceptions. The employer must also pay severance to an employee in nearly all instances where a labor contract, including a contract with an unlimited term, is terminated or expires. In addition, the government has continued to introduce various new labor-related regulations after the Labor Contract Law. Among other things, new annual leave requirements mandate that annual leave ranging from five to 15 days is available to nearly all employees and further require that the employer compensate an employee for any annual leave days the employee is unable to take in

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the amount of three times his daily salary, subject to certain exceptions. As a result of these new regulations designed to enhance labor protection, our labor costs are expected to increase. In addition, as the interpretation and implementation of these new regulations are still evolving, we cannot assure you that our employment practice will at all times be deemed in full compliance with the new regulations. If we are subject to severe penalties or incur significant liabilities in connection with labor disputes or investigations, our business and results of operations may be adversely affected.

Risks Related to this Offering

There has been no public market for our ordinary shares or ADSs prior to this offering, and you may not be able to resell our ADSs at or above the price you paid, or at all.

Prior to this initial public offering, there has been no public market for our ordinary shares or ADSs. We will apply to list the ADSs on the NYSE. Our ordinary shares will not be listed on any exchange or quoted for trading on any over-the-counter trading system. If an active trading market for our ADSs does not develop after this offering, the market price and liquidity of our ADSs will be materially and adversely affected.

Negotiations with the underwriters will determine the initial public offering price for our ADSs which may bear no relationship to their market price after the initial public offering. We cannot assure you that an active trading market for our ADSs will develop or that the market price of our ADSs will not decline below the initial public offering price.

The market price for our ADSs may be volatile.

The market price for our ADSs is likely to be highly volatile and subject to wide fluctuations in response to factors including the following:

Ÿ regulatory developments affecting us, our advertisers or our industry;

Ÿ announcements of studies and reports relating to the quality of our services or those of our competitors;

Ÿ changes in the economic performance or market valuations of other companies that provide online video or online advertising;

Ÿ actual or anticipated fluctuations in our quarterly results of operations and changes of our expected results;

Ÿ changes in financial estimates by securities research analysts;

Ÿ conditions in the online video or online advertising industry;

Ÿ announcements by us or our competitors of new services, acquisitions, strategic relationships, joint ventures or capital commitments;

Ÿ additions to or departures of our senior management;

Ÿ fluctuations of exchange rates between the Renminbi and the U.S. dollar;

Ÿ release or expiry of lock-up or other transfer restrictions on our outstanding ordinary shares or ADSs; and

Ÿ sales or perceived potential sales of additional ordinary shares or ADSs.

In addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of any particular companies. These market fluctuations may also have a material adverse effect on the market price of our ADSs.

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Our proposed dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.

Immediately prior to the completion of this offering, we expect to create a dual-class voting structure such that our ordinary shares will consist of Class A ordinary shares and Class B ordinary shares. Subject to certain exceptions, in respect of matters requiring the votes of shareholders, holders of Class A ordinary shares will be entitled to one vote per share, while holders of Class B ordinary shares will be entitled to three votes per share. We will issue Class A ordinary shares represented by our ADSs in this offering. Immediately prior to the completion of this offering, (i) all ordinary shares held by 1Look Holdings Ltd., which is wholly owned by our founder, chairman and chief executive officer, Victor Koo, and its affiliates will be automatically re-designated as Class B ordinary shares on a 1-for-1 basis, (ii) all preferred shares held by Chengwei Partners, L.P., Chengwei Ventures Evergreen Fund, L.P. and Chengwei Ventures Evergreen Advisors Fund, LLC, collectively referred to as Chengwei Funds, and their affiliates will be automatically converted into Class B ordinary shares each on a 1-for-1 basis, and (iii) all preferred shares held by our shareholders other than Chengwei Funds or their affiliates will be automatically converted into Class A ordinary shares on a 1-for-1 basis. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any transfer of Class B ordinary shares by a holder thereof to any person or entity which is not an affiliate of such holder, such Class B ordinary shares shall be automatically and immediately converted into the equal number of Class A ordinary shares. Due to the disparate voting powers attached to these two classes, we anticipate that Victor Koo and Chengwei Funds will beneficially own approximately             % of the aggregate voting power of our company immediately after this offering and will have considerable influence over matters requiring shareholder approval, subject to certain exceptions. This concentrated control will limit your ability to influence corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control transactions that holders of Class A ordinary shares and ADSs may view as beneficial.

Because our initial public offering price is substantially higher than our net tangible book value per share, you will experience immediate and substantial dilution.

If you purchase ADSs in this offering, you will pay more for your ADSs than the amount paid by our existing shareholders for their Class A ordinary shares on a per ADS basis. As a result, you will experience immediate and substantial dilution of approximately US$             per ADS, representing the difference between the assumed initial public offering price of US$             per ADS, the mid-point of the estimated range of the initial public offering price, and our net tangible book value per ADS as of                     , after giving effect to the automatic conversion of our preferred shares, immediately upon the completion of this offering and net proceed, to us from this offering. In addition, you may experience further dilution to the extent that our ordinary shares are issued upon the exercise of share options.

Because we do not expect to pay dividends in the foreseeable future after this offering, you must rely on price appreciation of our ADSs for return on your investment.

We currently intend to retain most, if not all, of our available funds and any future earnings after this offering to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our ADSs as a source for any future dividend income.

Our board of directors has complete discretion as to whether to distribute dividends. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow,

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our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our ADSs will likely depend entirely upon any future price appreciation of our ADSs. There is no guarantee that our ADSs will appreciate in value after this offering or even maintain the price at which you purchased the ADSs. You may not realize a return on your investment in our ADSs and you may even lose your entire investment in our ADSs.

Substantial future sales or perceived potential sales of our ADSs in the public market could cause the price of our ADSs to decline.

Sales of our ADSs or Class A ordinary shares in the public market after this offering, or the perception that these sales could occur, could cause the market price of our ADSs to decline. Upon completion of this offering, we will have              ordinary shares outstanding including              Class A ordinary shares represented by ADSs. All ADSs sold in this offering will be freely transferable without restriction or additional registration under the Securities Act. The remaining Class A ordinary shares outstanding after this offering will be available for sale, upon the expiration of the 180-day lock-up period beginning from the date of this prospectus, subject to volume and other restrictions as applicable under Rules 144 and 701 under the Securities Act. Any or all of these shares may be released prior to the expiration of the lock-up period at the discretion of the representatives. To the extent shares are released before the expiration of the lock-up period and sold into the market, the market price of our ADSs may decline. In addition, the shareholders of 1Verge Holdings Ltd., which will directly hold a total of 626,773,147 Class B ordinary shares of our company on an as-converted basis upon the completion of this offering, have agreed among themselves not to sell our shares through 1Verge Holdings Ltd. without the unanimous consent of 1Verge Holdings Ltd.’s board of directors for a period of two years after the completion of this offering. In the event that the shareholders of 1Verge Holdings Ltd. decide to release themselves from the two-year lock-up restrictions and sell our shares into the market, the market price of our ADSs may decline.

Upon completion of this offering, certain holders of our ordinary shares will have the right to cause us to register under the Securities Act the sale of their shares, subject to the 180-day lock-up period in connection with this offering. Registration of these shares under the Securities Act would result in ADSs representing these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration. Sales of these registered shares in the form of ADSs, in the public market could cause the price of our ADSs to decline.

You may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be able to exercise your right to vote.

Except as described in this prospectus and in the deposit agreement, holders of our ADSs will not be able to exercise voting rights attaching to the Class A ordinary shares represented by our ADSs on an individual basis. Holders of our ADSs will appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the Class A ordinary shares represented by the ADSs. You may not receive voting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote. For details of voting rights of our ordinary shareholders, please refer to “Description of Share Capital—Ordinary Shares—Voting Rights”, and for details of voting rights for our ADS holders, please refer to “Description of American Depositary Shares—Voting Rights.”

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The depositary for our ADSs will give us a discretionary proxy to vote our ordinary shares underlying your ADSs if you do not vote at shareholders’ meetings, except in limited circumstances, which could adversely affect your interests.

Under the deposit agreement for the ADSs, if you do not vote, the depositary will give us a discretionary proxy to vote the Class A ordinary shares underlying your ADSs at shareholders’ meetings unless:

Ÿ we have failed to timely provide the depositary with notice of meeting and related voting materials;

Ÿ we have instructed the depositary that we do not wish a discretionary proxy to be given;

Ÿ we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting;

Ÿ we have informed the depositary that a matter to be voted on at the meeting would have a material adverse impact on shareholders; or

Ÿ the voting at the meeting is to be made on a show of hands.

Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings, and you may not receive cash dividends if it is impractical to make them available to you.

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we cannot make rights available to you in the United States unless we register both the rights and the securities to which the rights relate under the Securities Act or an exemption from the registration requirements is available. Under the deposit agreement, the depositary will not make rights available to you unless both the rights and the underlying securities to be distributed to ADS holders are either registered under the Securities Act or exempt from registration under the Securities Act. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective and we may not be able to establish a necessary exemption from registration under the Securities Act. Accordingly, you may be unable to participate in our rights offerings and may experience dilution in your holdings.

The depositary of our ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on our ordinary shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent. However, the depositary may, at its discretion, decide that it is inequitable or impractical to make a distribution available to any holders of ADSs. For example, the depositary may determine that it is not practicable to distribute certain property through the mail, or that the value of certain distributions may be less than the cost of mailing them. In these cases, the depositary may decide not to distribute such property to you.

You may be subject to limitations on transfer of your ADSs.

Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

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You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited because we are incorporated under Cayman Islands law, we conduct substantially all of our operations in China and substantially all of our directors and officers reside outside the United States.

We are incorporated in the Cayman Islands and conduct substantially all of our operations in China through our PRC subsidiaries and consolidated affiliated entities. Substantially all of our directors and officers reside outside the United States and a substantial portion of their assets are located outside of the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the Cayman Islands or in China in the event that you believe that your rights have been infringed under the securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of China may render you unable to enforce a judgment against our assets or the assets of our directors and officers. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will generally recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. For more information regarding the relevant laws of the Cayman Islands and China, see “Enforceability of Civil Liabilities.”

Our corporate affairs are governed by our memorandum and articles of association, as amended and restated from time to time, and by the Companies Law (2010 Revision) and common law of the Cayman Islands. The rights of shareholders to take legal action against us and our directors, actions by minority shareholders and the fiduciary responsibilities of our directors are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, which provides persuasive, but not binding, authority. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States and provides significantly less protection to investors. In addition, shareholders in Cayman Islands companies may not have standing to initiate a shareholder derivative action in U.S. federal courts.

As a result, our public shareholders may have more difficulty in protecting their interests through actions against us, our management, our directors or our major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

You must rely on the judgment of our management as to the use of the net proceeds from this offering, and such use may not produce income or increase our ADS price.

We intend to use the net proceeds of this offering for, among other things, video content acquisition, investment in bandwidth and purchases of servers and equipment for our CDN infrastructure, expansion of product development and sales and marketing efforts. However, our management will have considerable discretion in the application of the net proceeds received by us. For more information, see “Use of Proceeds.” You will not have the opportunity, as part of your investment decision, to assess whether proceeds are being used appropriately. You must rely on the judgment of our management regarding the application of the net proceeds of this offering. The net proceeds may be used for corporate purposes that do not improve our efforts to maintain profitability or increase our ADS price. The net proceeds from this offering may be placed in investments that do not produce income or that lose value.

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Our memorandum and articles of association will contain anti-takeover provisions that could adversely affect the rights of holders of our ordinary shares and ADSs.

We will adopt an amended and restated memorandum and articles of association that will become effective immediately upon the closing of this offering. Our new memorandum and articles of association will contain certain provisions that could limit the ability of others to acquire control of our company, including a provision that grants authority to our board directors to establish from time to time one or more series of preferred shares without action by our shareholders and to determine, with respect to any series of preferred shares, the terms and rights of that series. The provisions could have the effect of depriving our shareholders of the opportunity to sell their shares at a premium over the prevailing market price by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transactions.

Our corporate actions are substantially controlled by our directors, executive officers and other principal shareholders, who can exert significant influence over important corporate matters, which may reduce the price of our ADSs and deprive you of an opportunity to receive a premium for your shares.

After this offering, our directors, executive officers and principal shareholders will beneficially own approximately             % of our outstanding ordinary shares, representing             % of our total voting power. These shareholders, if acting together, could exert substantial influence over matters such as electing directors and approving material mergers, acquisitions or other business combination transactions. This concentration of ownership may also discourage, delay or prevent a change in control of our company, which could have the dual effect of depriving our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and reducing the price of our ADSs. These actions may be taken even if they are opposed by our other shareholders, including those who purchase ADSs in this offering. In addition, these persons could divert business opportunities away from us to themselves or others.

We are likely treated as a passive foreign investment company for United States federal income tax purposes for our taxable year that includes this offering and may be so classified for subsequent taxable years.

We are likely treated as a “passive foreign investment company,” or PFIC, for U.S. federal income tax purposes, for our taxable year that includes this offering. Depending upon the value of our ordinary shares and ADSs and the nature of our assets and income over time, we may continue to be treated as a PFIC for 2011 or subsequent taxable years United States federal income tax purposes. A non-United States corporation will be treated as a PFIC for any taxable year if either (i) 75% or more of its gross income for such year consists of certain types of “passive” income, or (ii) 50% or more of the value of its assets (determined on the basis of a quarterly average) during such year is attributable to assets that produce passive income or are held for the production of passive income, or the asset test. Passive income is any income that would be foreign personal holding company income under the Internal Revenue Code of 1986, as amended, including, without limitation, dividends, interest, royalties, rents, annuities, net gains from the sale or exchange of property producing such income, net gains from commodity transactions, net foreign currency gains and income from notional principal contracts. For purposes of this test, we will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, more than 25%, by value, of the stock. Although the law in this regard is unclear, we treat 1Verge Information and Jiaheyi as being owned by us for United Stated federal income tax purposes, not only because we exercise effective control over the operation of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we consolidate their results of operations in our consolidated financial statements. Assuming that we are owner of such entities for United States federal income tax purposes, based on our current income and assets and projections

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as to the value of our ordinary shares and ADSs pursuant to this offering, we do not expect to continue to be treated as a PFIC for 2011 taxable year or the foreseeable future. Therefore, if you make a “deemed sale” or “deemed dividend” election (as each is described in “Taxation—Material United States Federal Income Tax Considerations—Passive Foreign Investment Company Considerations”), your ADSs or ordinary shares with respect to which such election was made should not be treated as shares in a PFIC unless we subsequently become a PFIC. While we do not anticipate continuing being a PFIC in 2011, because the value of our assets for purposes of the asset test will generally be determined by reference to the market price of our ADSs or ordinary shares, fluctuations in the market price of our ADSs or ordinary shares may cause us to continue being a PFIC for 2011 or subsequent taxable years. Because there are uncertainties in the application of the relevant rules and PFIC status is a factual determination made annually after the close of each taxable year on the basis of the composition of our income and the value of our active versus passive assets, there can be no assurance that we will not continue being a PFIC for the taxable year 2011 or any future taxable year.

We have not sought a ruling from the United States Internal Revenue Service, or the IRS, with respect to our PFIC status, and there can be no assurance that the IRS will agree with our determination. The overall level of our passive assets will be affected by (i) future growth in activities that may potentially produce passive income, and (ii) how, and how quickly, we spend our liquid assets and the cash raised in this offering. Under circumstances where revenues from activities that produce passive income significantly increase relative to our revenues from activities that produce non-passive income or where we determine not to deploy significant amounts of cash for active purposes, our risk of continuing to be treated as a PFIC may substantially increase. In addition, if it were determined that we are not the owner of 1Verge Information and Jiaheyi for United States federal income tax purposes, we would likely be treated as a PFIC for our current taxable year and any subsequent taxable year.

If we were to be or become treated as a PFIC, a U.S. Holder (as defined in “Taxation—Material United States Federal Income Tax Considerations—General”) may incur significantly increased United States income tax on gain recognized on the sale or other disposition of the ADSs or ordinary shares and on the receipt of distributions on the ADSs or ordinary shares to the extent such gain or distribution is treated as an “excess distribution” under the United States federal income tax rules. Further, if we are so treated, our ADSs or ordinary shares generally will continue to be treated as shares in a PFIC for all succeeding years during which such U.S. Holder holds our ADSs or ordinary shares, unless we cease to be a PFIC and the U.S. Holder makes a “deemed sale” election or “deemed dividend” election with respect to the ADSs or ordinary shares. You are urged to consult your tax advisor concerning the United States federal income tax consequences of acquiring, holding, and disposing of ADSs or ordinary shares if we are or become treated as a PFIC. For more information see “Taxation—Material United States Federal Income Tax Considerations—Passive Foreign Investment Company Considerations.”

We expect to be a controlled foreign corporation, or CFC, for U.S. federal income tax purposes.

We are likely treated as a CFC for U.S. federal income tax purposes. We will be a CFC for

any year in which U.S. Holders (as defined in “Taxation—Material United States Federal Income Tax Considerations—General”) that each own (directly, indirectly or by attribution) at least 10% of our voting shares and together own more than 50% of the total combined voting power of all classes of our voting shares or more than 50% of the total value of our shares. Our classification as a CFC has many complex results, but one is that any U.S. Holder that is a 10% U.S. Holder on the last day of our taxable year would be required to recognize as ordinary income his or her pro rata share of “Subpart F Income” of our company and our subsidiaries (which, in our company’s case, should not generally include our subsidiaries’ operating income) for the taxable year, whether or not the U.S. Holder received any distributions on his or her ADSs or ordinary shares during that taxable year. For this purpose, Subpart F Income includes, without limitations, sales or services income that is generated

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outside of the CFC’s country of organization and that involves affiliates, dividends, interest, royalties, rent, annuities, net gains from the sale or exchange of property producing such income, net gains from commodity transactions, net foreign currency gains and income from notional principal contracts, and certain other income. For more information see “Taxation—Material United States Federal Income Tax Considerations—Controlled Foreign Corporation Status and Related Tax Consequences.”

We will incur increased costs as a result of being a public company.

As a public company, we will incur significant accounting, legal and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act, as well as rules subsequently implemented by the Securities and Exchange Commission and the NYSE, have detailed requirements concerning corporate governance practices of public companies including Section 404 relating to internal control over financial reporting. We expect these and other rules and regulations applicable to public companies to increase our accounting, legal and financial compliance costs and to make certain corporate activities more time-consuming and costly. We are currently evaluating and monitoring developments with respect to these new rules, and we cannot predict or estimate with reasonable certainty the amount of additional costs we may incur or the timing of such costs, though we expect such additional costs not to exceed US$2 million in each of the next two years.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that reflect our current expectations and views of future events. The forward looking statements are contained principally in the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” Known and unknown risks, uncertainties and other factors, including those listed under “Risk Factors,” may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.

You can identify some of these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include statements relating to:

Ÿ our goals and strategies;

Ÿ our future business development, financial condition and results of operations;

Ÿ the expected growth of the online video market in China;

Ÿ our expectations regarding demand for and market acceptance of our services;

Ÿ our expectations regarding the retention and strengthening of our relationships with key advertisers and customers;

Ÿ our plans to enhance user experience, infrastructure and service offerings;

Ÿ competition in our industry in China; and

Ÿ relevant government policies and regulations relating to our industry.

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different from our expectations. Important risks and factors that could cause our actual results to be materially different from our expectations are generally set forth in “Prospectus Summary—Our Challenges,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” “Regulation” and other sections in this prospectus. You should thoroughly read this prospectus and the documents that we refer to with the understanding that our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements.

This prospectus contains certain data and information that we obtained from various government and private publications. Statistical data in these publications also include projections based on a number of assumptions. The online video industry may not grow at the rate projected by market data, or at all. The failure of this market to grow at the projected rate may have a material adverse effect on our business and the market price of our ADSs. In addition, the rapidly changing nature of the online video industry results in significant uncertainties for any projections or estimates relating to the growth prospects or future condition of our market. Furthermore, if any one or more of the assumptions underlying the market data is later found to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue reliance on these forward-looking statements.

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The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this prospectus and the documents that we refer to in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect.

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USE OF PROCEEDS

We estimate that we will receive net proceeds from this offering of approximately US$             million, or approximately US$             million if the underwriters exercise their option to purchase additional ADSs in full, after deducting underwriting discounts and the estimated offering expenses payable by us. These estimates are based upon an assumed initial public offering price of US$             per ADS (the mid-point of the range shown on the front cover page of this prospectus). A US$1.00 increase (decrease) in the assumed initial public offering price of US$             per ADS would increase (decrease) the net proceeds to us from this offering by US$             million, assuming the number of ADSs offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated expenses payable by us.

The primary purposes of this offering are to create a public market for our shares for the benefit of all shareholders, retain talented employees by providing them with equity incentives, and obtain additional capital. We plan to use the net proceeds of this offering as follows:

Ÿ approximately US$              million for investments in technology, infrastructure and product development efforts;

Ÿ approximately US$              million for video content acquisition;

Ÿ approximately US$              million for the expansion of sales and marketing efforts; and

Ÿ the balance for other general corporate purposes, including working capital needs and potential acquisitions (although we are not currently negotiating any such acquisitions).

The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. Our management, however, will have significant flexibility and discretion to apply the net proceeds of this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus.

Pending any use as described above, we plan to invest the net proceeds we will receive from this offering in short-term debt instruments or demand deposits.

In using the proceeds of this offering, as an offshore holding company, we are permitted, under PRC laws and regulations, to provide funding to our PRC subsidiaries only through loans or capital contributions and to our consolidated affiliated entities only through loans. Subject to satisfaction of applicable government registration and approval requirements, we may extend loans to our PRC subsidiaries and consolidated affiliated entities or make additional capital contributions to our PRC subsidiaries to fund its capital expenditures or working capital. There are no costs associated with registering loans or capital contributions with relevant PRC authorities, other than nominal processing charges. Under PRC laws and regulations, the PRC governmental authorities are required to process such approvals or registrations or deny our application within a prescribed time period which is usually less than 90 days. The actual time taken, however, may be longer due to administrative delays. We cannot assure you that we will be able to obtain these government registrations or approvals on a timely basis, if at all. See “Risk Factors—Risks Related to Our Corporate Structure—PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may limit our use of the proceeds we receive from this offering to fund our expansion or operations.”

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DIVIDEND POLICY

We have not paid in the past and do not have any present plan to pay any cash dividends on our ordinary shares in the foreseeable future after this offering. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

As we are a holding company, we rely, in part, on dividends paid to us by our PRC subsidiaries for our cash requirements, including funds to pay dividends and other cash distributions to our shareholders, service any debt we may incur and pay our operating expenses. In China, the payment of dividends is subject to limitations. PRC laws and regulations currently permit payment of dividends only out of accumulated profits as determined in accordance with PRC accounting standards and regulations. Under current PRC laws and regulations, our PRC subsidiaries are required to set aside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds until such reserve funds reach 50% of their registered capital. At the discretion of our PRC subsidiaries, they may allocate a portion of their after-tax profits based on PRC accounting standards to staff welfare and bonus funds. These reserves may not be distributed as cash dividends. Further, if our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us.

Our board of directors has complete discretion on whether to declare dividends, subject to the approval of our shareholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. If we pay any dividends, they will be paid in accordance with Cayman Islands law, which provides, in summary, that dividends may be paid out of profits and/or our share premium account provided that in the case of our share premium account, no such distribution or dividend paid to our shareholders will cause us to be unable to pay our debts as they fall due in the ordinary course of our business. In addition, the Companies Law (2010 Revision) of the Cayman Islands prevents us from offering our shares or securities to individuals within the Cayman Islands which may limit our ability to distribute a dividend comprised of our shares or other securities. We will pay our ADS holders to the same extent as holders of our Class A ordinary shares, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. See “Description of American Depositary Shares.” Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.

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CAPITALIZATION

The following table sets forth our capitalization as of September 30, 2010:

Ÿ on an actual basis;

Ÿ on a pro forma basis to reflect the automatic conversion of all of our outstanding preferred shares and the preferred shares issuable upon the exercise of all outstanding warrants into              Class A ordinary shares and              Class B ordinary shares immediately prior to the closing of this offering; and

Ÿ on a pro forma as adjusted basis to reflect the automatic conversion of all of our outstanding preferred shares and the preferred shares issuable upon the exercise of all outstanding warrants into              Class A ordinary shares and              Class B ordinary shares immediately prior to the closing of this offering, and the sale of              Class A ordinary shares in the form of ADSs by us in this offering at an assumed initial public offering price of US$              per ADS, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

You should read this table together with our consolidated financial statements and the related notes included elsewhere in this prospectus and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

	As of September 30, 2010
	Actual			Pro Forma			Pro Forma As Adjusted
	RMB			RMB			RMB
	(in thousands)
	(Unaudited)			(Unaudited)			(Unaudited)
Convertible redeemable preferred shares, US$0.00001 par value, 1,202,581,047 shares authorized, 1,190,022,965 shares issued and outstanding:
Series A convertible redeemable preferred shares		24,523			—			—
Series B convertible redeemable preferred shares		94,248			—			—
Series C convertible redeemable preferred shares		183,998			—			—
Series D convertible redeemable preferred shares		204,845			—			—
Series E convertible redeemable preferred shares		272,985			—			—
Series F convertible redeemable preferred shares		321,726			—			—
Total convertible redeemable preferred shares		1,102,325			—			—
Equity:
Ordinary shares, US$0.00001 par value, 5,000,000,000 shares authorized, 365,000,000 shares issued and outstanding, and 1,555,698,080 shares issued and outstanding on a pro forma basis		30			114
Additional paid-in capital		19,951			1,122,192
Statutory reserve		—			—
Retained earnings		(661,817	)		(661,817	)
Accumulated other comprehensive loss		(3,524	)		(3,524	)
Total shareholder’s equity		(645,360	)		456,965
Noncontrolling interest		—			—			—
Total shareholders’ equity		(645,360	)		456,965
Total capitalization		456,965			456,965

⁽¹⁾ A US$1.00 increase (decrease) in the assumed initial public offering price of US$             would increase (decrease) each of additional paid-in capital, total shareholders’ equity and total capitalization by US$            .

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DILUTION

If you invest in our ADSs, your interest will be diluted to the extent of the difference between the initial public offering price per ADS and our net tangible book value per ADS after this offering. Dilution results from the conversion of our preferred shares and the fact that the initial public offering price per Class A ordinary share is substantially in excess of the book value per ordinary share attributable to the existing shareholders for our presently outstanding ordinary shares.

Our net tangible book value as of September 30, 2010 was approximately US$60.0 million, or US$0.16 per ordinary share as of that date, and US$             per ADS. Net tangible book value represents the amount of our total consolidated tangible assets, less the amount of our total consolidated liabilities. Dilution is determined by subtracting net tangible book value per ordinary share, after giving effect to the conversion of all outstanding preferred shares into ordinary shares immediately upon the completion of this offering and the additional proceeds we will receive from this offering, from the assumed initial public offering price per ordinary share, which is the mid-point of the estimated initial public offering price range set forth on the cover page of this prospectus adjusted to reflect the ADS-to-ordinary share ratio, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

Without taking into account any other changes in net tangible book value after September 30, 2010, other than to give effect to the conversion of all outstanding preferred shares into ordinary shares immediately prior to the completion of this offering and our sale of the ADSs offered in this offering at the assumed initial public offering price of US$             per ADS after deduction of the underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma net tangible book value as of September 30, 2010 would have been US$             million, or US$             per outstanding ordinary share and US$             per ADS. This represents an immediate increase in net tangible book value of US$             per ordinary share and US$             per ADS to the existing shareholders and an immediate dilution in net tangible book value of US$             per ordinary share and US$             per ADS to investors purchasing ADSs in this offering. The following table illustrates such dilution:

	Ordinary Share		ADS
Assumed initial public offering price		US$		US$
Net tangible book value per share as of September 30, 2010		US$		US$
Pro forma net tangible book value per share after giving effect to the conversion of our preferred shares		US$		US$
Pro forma net tangible book value per share after giving effect to the conversion of our preferred shares and this offering		US$		US$
Amount of dilution in net tangible book value per share to new investors in the offering		US$		US$

The amount of dilution in net tangible book value to new investors in this offering set forth above is calculated by deducting (i) the pro forma net tangible book value after giving effect to the automatic conversion of our preferred shares from (ii) the pro forma net tangible book value after giving effect to the automatic conversion of our preferred shares and this offering.

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The following table summarizes, on a pro forma basis as of September 30, 2010, the differences between existing shareholders, including holders of our preferred shares that will be automatically converted into ordinary shares immediately upon the completion of this offering, and the new investors with respect to the number of ordinary shares (in the form of ADSs or shares) purchased from us, the total consideration paid and the average price per ordinary share/ADS paid before deducting the underwriting discounts and commissions and estimated offering expenses. The total number of ordinary shares does not include ordinary shares underlying the ADSs issuable upon the exercise of the over-allotment option granted to the underwriters.

	Ordinary Shares Purchased				Total Consideration				Average Price Per Ordinary Share	Average Price Per ADS
	Number	Percent			Amount	Percent
	(in thousands of US$, except number of shares and percentages)
Existing shareholders				%				%
New investors				%				%
Total			100.0	%			100.0	%

A US$1.00 increase (decrease) in the assumed public offering price of US$              per ADS would increase (decrease) our pro forma net tangible book value after giving effect to the offering by US$              million, the pro forma net tangible book value per ordinary share and per ADS after giving effect to the automatic conversion of our preferred shares and this offering by US$              per ordinary share and US$              per ADS and the dilution in pro forma net tangible book value per ordinary share and per ADS to new investors in this offering by US$              per ordinary share and US$              per ADS, assuming no change to the number of ADSs offered by us as set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and other offering expenses.

The pro forma information discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our ADSs and other terms of this offering determined at pricing.

The discussion and tables above also assume no exercise of any outstanding stock options. As of             , 2010 there were              ordinary shares issuable upon exercise of outstanding stock options at a weighted average exercise price of US$              per share, and there were              ordinary shares available for future issuance upon the exercise of future grants under our 2006 Stock Option Scheme, as amended, and our 2010 Share Incentive Plan. To the extent that any of these options are exercised, there will be further dilution to new investors.

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EXCHANGE RATE INFORMATION

Substantially all of our operations are conducted in China and all of our revenues are denominated in Renminbi. This prospectus contains translations of Renminbi amounts into U.S. dollars at specific rates solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi in this prospectus were made at a rate of RMB6.6905 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on September 30, 2010. We make no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, at the rates stated below, or at all. The PRC government imposes control over its foreign currency reserves in part through direct regulation of the conversion of Renminbi into foreign exchange and through restrictions on foreign trade. On November 5, 2010, the noon buying rate was RMB6.6622 to US$1.00.

The following table sets forth information concerning exchange rates between the Renminbi and the U.S. dollar for the periods indicated. These rates are provided solely for your convenience and are not necessarily the exchange rates that we used in this prospectus or will use in the preparation of our periodic reports or any other information to be provided to you. For all dates and periods through December 31, 2008, exchange rates of Renminbi into U.S. dollars are based on the noon buying rate in The City of New York for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York. For January 1, 2009 and all later dates and periods, the exchange rate refers to the exchange rate as set forth in the H.10 statistical release of the Federal Reserve Board.

	Noon Buying Rate
Period	Period End		Average(1)		Low		High
	(RMB per US$1.00)
2005		8.0702		8.1826		8.2765		8.0702
2006		7.8041		7.9579		8.0702		7.8041
2007		7.2946		7.5806		7.8127		7.2946
2008		6.8225		6.9193		7.2946		6.7800
2009		6.8259		6.8295		6.8470		6.8176
2010
May		6.8305		6.8275		6.8310		6.8245
June		6.7815		6.8184		6.8323		6.7815
July		6.7735		6.7762		6.7807		6.7709
August		6.8069		6.7873		6.8069		6.7670
September		6.6905		6.7396		6.8102		6.6869
October		6.6705		6.6675		6.6912		6.6397
November (through November 5, 2010)		6.6622		6.6766		6.6906		6.6622

Source: Federal Reserve Statistical Release

(1) Annual averages are calculated using the average of month-end rates of the relevant year. Monthly averages are calculated using the average of the daily rates during the relevant period.

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ENFORCEABILITY OF CIVIL LIABILITIES

We were incorporated in the Cayman Islands in order to enjoy certain benefits, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of exchange control or currency restrictions, and the availability of professional and support services. However, certain disadvantages accompany incorporation in the Cayman Islands. These disadvantages include a less developed body of Cayman Islands securities laws that provide significantly less protection to investors as compared to the laws of the United States, and the potential lack of standing by shareholders of Cayman Islands companies to sue before the federal courts of the United States.

Our organizational documents do not contain provisions requiring disputes, including those arising under the securities laws of the United States, between us, our officers, directors and shareholders, be arbitrated.

Substantially all of our operations are conducted in China, and substantially all of our assets are located in China. A majority of our officers are nationals or residents of jurisdictions other than the United States and a substantial portion of their assets are located outside the United States. As a result, it may be difficult for a shareholder to effect service of process within the United States upon these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.

We have appointed Law Debenture Corporate Services Inc. as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.

Appleby, our counsel as to Cayman Islands law, and TransAsia Lawyers, our counsel as to PRC law, have advised us, respectively, that there is uncertainty as to whether the courts of the Cayman Islands and China, respectively, would:

Ÿ recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or

Ÿ entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

Appleby has further advised us that a final and conclusive judgment in the federal or state courts of the United States under which a sum of money is payable, other than a sum payable in respect of taxes, fines, penalties or similar charges, and which was neither obtained in a manner nor is of a kind enforcement of which is contrary to natural justice or the public policy of the Cayman Islands, nor based on an error in Cayman Islands law or obtained by fraud, may be the subject of enforcement proceedings as a debt in the courts of the Cayman Islands under the common law doctrine of obligation by action on the debt evidenced by the judgment of such foreign court without any re-examination of the merits of the underlying dispute, provided that the court which gave the judgment was competent to hear the action in accordance with private international law principles as applied in the Cayman Islands. However, the Cayman Islands courts are unlikely to enforce a punitive judgment of a United States court predicated upon the liabilities provision of the federal securities laws in the United States without retrial on the merits if such judgment gives rise to obligations to make payments that may be regarded as fines, penalties or similar charges.

TransAsia Lawyers has further advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on principles of

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reciprocity between jurisdictions. China does not have any treaties or other form of reciprocity with the United States or the Cayman Islands that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States or the Cayman Islands.

In addition, it will be difficult for U.S. shareholders to originate actions against us in China based upon Cayman Islands, U.S. or PRC laws, because we are incorporated under the laws of the Cayman Islands and it is difficult for U.S. shareholders, by virtue only of holding our ADSs or common shares, to establish a connection to the PRC as required by the PRC Civil Procedures Law in order for a PRC court to have jurisdiction. U.S. shareholders may be able to originate actions against us in the Cayman Islands based upon Cayman Islands laws. However, we do not have any substantial assets other than certain corporate documents and records in the Cayman Islands and it may be difficult for a shareholder to enforce a judgment obtained in a Cayman Islands court in China, where all of our operations are conducted.

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CORPORATE STRUCTURE

On September 20, 2005, our founder, Victor Koo, incorporated 1Verge Inc. in the Cayman Islands. On June 20, 2008, we changed the company name from 1Verge Inc. to Youku.com Inc. On November 14, 2005, we established our wholly-owned subsidiary, 1Verge Internet in Beijing, China. On April 27, 2010, we acquired all of the equity interest in Jet Brilliant, a Hong Kong company, which wholly owns Jet Brilliant Beijing, an advertising company established in Beijing, China. For a description of the tax implications of having Jet Brilliant as our Hong Kong intermediary holding company and the relevant PRC laws and regulations, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Taxation—PRC” and “Regulation—Regulations on Tax—Dividends Withholding Tax.”

The following chart illustrates our corporate structure as of the date of this prospectus:

(1) 1Verge Information and Jiaheyi are our consolidated affiliated entities established in China and each is 80% owned by Ms. Qiong Qin, the wife of our founder, Mr. Victor Koo, and 20% owned by Mr. Dele Liu, our director, chief financial officer and senior vice president. We effectively control 1Verge Information and Jiaheyi through contractual arrangements. See “Corporate Structure.”

Applicable PRC laws and regulations currently restrict foreign ownership of companies that provide value-added telecommunications services. To comply with these foreign ownership restrictions, we conduct our online video operations in China primarily through our consolidated affiliated entity, 1Verge Information. 1Verge Information is our website operator and Internet content provider, and holds the licenses and permits issued by both the telecommunication and broadcast media authorities as well as other ancillary licenses and permits to conduct our online video operations. PRC laws and regulations also restrict foreign ownership of companies that conduct advertising business by requiring a sino-foreign joint venture’s foreign investor to have previously had two years’ direct advertising operations as its main business outside of China, and a wholly foreign-owned enterprise’s foreign investor to have previously had three years’ direct advertising operations as its main business outside of China. As a Cayman Islands company, we are a foreign legal person under PRC laws and we have not involved in any advertising business outside of China for the

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requisite number of years. We conduct our advertising business in China primarily through our consolidated affiliated entities, 1Verge Information and Jiaheyi. Jet Brilliant is a Hong Kong company which satisfies the requirement of having three years’ direct advertising operations, and therefore was approved by local branch of the SAIC to establish Jet Brilliant Beijing on May 19, 2009, a wholly foreign-owned advertising company. As we acquired Jet Brilliant on April 27, 2010, Jet Brilliant Beijing will conduct our advertising agency business.

The business operations of 1Verge Internet and Jet Brilliant Beijing are both within the approved business scope as set forth in each of their business licenses. In particular, the business scope of 1Verge Internet includes research, development and production of computer software and hardware; provision of computer network system integration service; provision of computer utility system installation and maintenance services; provision of technical and business consulting, technical services, technology transfer, and technical training; and sale of self-produced goods. The business scope of Jet Brilliant Beijing includes: designing, producing, publishing and providing agency services for domestic and foreign advertisements; corporate image planning; business consulting; information consulting; conference services.

1Verge Information and Jiaheyi are both limited liability companies established in China. Qiong Qin and Dele Liu, both of whom are PRC citizens, owned 80% and 20% of Jiaheyi, respectively. Ms. Qin is our founder Mr. Koo’s wife and is not currently involved in our management. Mr. Liu is our director, chief financial officer and senior vice president. As of December 31, 2009, Jiaheyi, Ms. Qin and Mr. Liu owned 95%, 4% and 1% of 1Verge Information, respectively. On May 19, 2010, Jiaheyi transferred its 95% equity interest in 1Verge Information to Ms. Qin and Mr. Liu. As a result of this transfer, 1Verge Information is 80% owned by Ms. Qin and 20% owned by Mr. Liu. We intend to begin the process of liquidating Jiaheyi in 2011, and Jet Brilliant Beijing as our wholly owned subsidiary will conduct our advertising agency business in the future. However, we do not expect that the advertising agency business will play an important role in our overall business in the future.

Our wholly owned subsidiary 1Verge Internet has entered into a series of contractual arrangements with 1Verge Information, Jiaheyi and their respective shareholders, which enable us to:

Ÿ exercise effective control over the business management and shareholder voting rights of 1Verge Information and Jiaheyi;

Ÿ receive substantially all of the economic benefits of 1Verge Information and Jiaheyi through service and licensing fees in consideration for the technical and consulting services provided by and the intellectual property rights licensed by 1Verge Internet; and

Ÿ have an exclusive option to purchase all of the equity interests in 1Verge Information and Jiaheyi when and to the extent permitted under PRC laws, regulations and legal procedures.

We do not have any equity interest in our consolidated affiliated entities. However, we have been and are expected to continue to be dependent on our consolidated affiliated entities to operate our business if the then PRC law does not allow us to directly operate such business in China, or our direct operations will cause a material adverse impact on our business, including but not limited to, the inability to maintain or renew the qualifications, licenses or permits necessary for our business in China. We believe that under these contractual arrangements, we have substantial control over our consolidated affiliated entities and their respective shareholders to renew, revise or enter into new contractual arrangements prior to the expiration of the current arrangements on terms that would enable us to continue to operate our business in China after the expiration of the current arrangements, or pursuant to certain amendments and changes of the current applicable PRC laws, regulations and rules on terms that would enable us to continue to operate our business in China legally. For a detailed description of the regulatory environment that necessitates the adoption of our

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corporate structure, see “Regulation.” For a detailed description of the risks associated with our corporate structure and the contractual arrangements that support our corporate structure, see “Risk Factors—Risks Related to Our Corporate Structure.”

The following is a summary of the currently effective contracts among our subsidiary 1Verge Internet, our consolidated affiliated entities 1Verge Information and Jiaheyi, and the respective shareholders of 1Verge Information and Jiaheyi.

Agreements that Provide Us Effective Control over 1Verge Information and Jiaheyi

Amended and Restated Business Operations Agreements.    Pursuant to the amended and restated business operations agreement dated August 16, 2010 among 1Verge Internet, 1Verge Information and its shareholders, 1Verge Information must appoint the persons designated by 1Verge Internet to be its executive director or directors, general manager, chief financial officer and any other senior officers. 1Verge Information agrees to accept the proposal provided by 1Verge Internet from time to time relating to employment, daily business and financial management. Without 1Verge Internet’s prior written consent, 1Verge Information shall not conduct any transaction which may materially affect its assets, obligations, rights or operations, including but not limited to, incurrence or assumption of any indebtedness, sale or purchase of any assets or rights, incurrence of any encumbrance on any of its assets or intellectual property rights in favor of a third party, or transfer of any rights or obligations under this agreements to a third party. The term of this agreement is ten years and will be extended automatically for another ten years unless 1Verge Internet provides written notice requesting no extension three months prior to the expiration date. 1Verge Internet may terminate the agreement at any time by providing 30 days’ advance written notice to 1Verge Information and to each of its shareholders. Neither 1Verge Information nor any of its shareholders may terminate this agreement prior to the expiration date or during the ten-year extension period.

The amended and restated business operations agreement dated August 16, 2010 among 1Verge Internet, Jiaheyi and its shareholders contains terms substantially similar to the business operations agreement described above.

Amended and Restated Equity Interest Pledge Agreements.    Pursuant to the amended and restated equity interest pledge agreement dated August 16, 2010 among 1Verge Internet and the shareholders of 1Verge Information, the shareholders of 1Verge Information pledge all of their equity interest in 1Verge Information to 1Verge Internet, to guarantee 1Verge Information and its shareholders’ performance of their obligations under, where applicable, the amended and restated loan agreement, the amended and restated exclusive technical and consulting services agreement, the amended and restated trademark license agreement, the amended and restated domain name license agreement and the amended and restated equity option agreement. If 1Verge Information and/or any of its shareholders breach their contractual obligations under these agreements, 1Verge Internet, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Without 1Verge Internet’s prior written consent, shareholders of 1Verge Information shall not transfer or assign the pledged equity interests, or create or allow any encumbrance that would prejudice 1Verge Internet’s interests. During the term of this agreement, 1Verge Internet is entitled to receive all of the dividends and profits paid on the pledged equity interests. The equity interest pledge will be effective upon the completion of the registration of the pledge with the competent local branch of the SAIC, and expire on the earlier of (i) the date on which 1Verge Information and its shareholders have fully performed their obligations under the amended and restated loan agreement, the amended and restated exclusive technical and consulting services agreement, the amended and restated trademark license agreement, the amended and restated domain name license agreement and the amended and restated equity option agreement; or (ii) 1Verge Internet enforces the pledge pursuant to the terms and conditions under this agreement, to fully satisfy its rights under such agreements. We have registered

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the pledge of the equity interests in 1Verge Information and Jiaheyi with the competent local branch of the SAIC. To date, 1Verge Information and Jiaheyi have fully performed their obligations under the relevant agreements but such obligations will remain on them until the expiration of the terms of such agreements, which are typically ten years subject to automatic renewal for an additional ten-year term or earlier termination as set forth in such agreements.

The amended and restated equity interest pledge agreement dated September 27, 2010 among 1Verge Internet and the shareholders of Jiaheyi is substantially similar to the equity interest pledge agreement described above, and guarantees the performance by Jiaheyi and its shareholders of their obligations under, where applicable, the amended and restated loan agreement, the amended and restated exclusive technical and consulting services agreement and the amended and restated equity option agreement.

Power of Attorney.    Pursuant to the power of attorney dated August 16, 2010, the shareholders of 1Verge Information each irrevocably appointed our chief executive officer, Mr. Victor Koo, the person designated by 1Verge Internet, as their attorney-in-fact to vote on their behalf on all matters of 1Verge Information requiring shareholder approval under PRC laws and regulations and 1Verge Information’s articles of association. The appointment of Mr. Koo as the attorney-in-fact is conditional upon his being the employee and the designated person of 1Verge Internet. Each power of attorney will remain in force for ten years until the earlier of the following events: (i) Mr. Koo loses his title or position in 1Verge Internet or 1Verge Internet issues a written notice to dismiss or replace Mr. Koo with another person; and (ii) the business operations agreement among 1Verge Internet, 1Verge Information and its shareholders terminates or expires.

The shareholders of Jiaheyi have also each executed an irrevocable power of attorney dated August 16, 2010 appointing Mr. Koo, the person designated by 1Verge Internet, as their attorney-in-fact to vote on their behalf on all matters of Jiaheyi requiring shareholder approval, with terms substantially similar to the power of attorney executed by the shareholders of 1Verge Information described above.

Agreements that Transfer Economic Benefits to Us

Amended and Restated Exclusive Technical and Consulting Services Agreements.     Pursuant to the amended and restated exclusive technical and consulting services agreement dated August 16, 2010 between 1Verge Internet and 1Verge Information, 1Verge Internet has exclusive right to provide technical and consulting services relating to, among other things, maintenance of the machine room and website, provision and maintenance of the office network, integrated security services for the website, and certain other business areas to 1Verge Information. Without 1Verge Internet’s prior written consent, 1Verge Information shall not engage any third party for any of the technical and consulting services provided under this agreement. In addition, 1Verge Internet exclusively owns all intellectual property rights resulting from the performance of this agreement. 1Verge Information agrees to pay a service fee to 1Verge Internet based on a set formula defined in this agreement, and during the term of this agreement, 1Verge Internet shall have the right to adjust the service fee at its sole discretion without the consent of 1Verge Information. The term of this agreement is ten years and will be extended automatically for another ten years unless terminated by 1Verge Internet’s written notice three months prior to the expiration date. 1Verge Internet can terminate the agreement at any time by providing 30 days’ prior written notice. 1Verge Information is not permitted to terminate the agreement prior to the expiration date, unless 1Verge Internet fails to comply with any of its obligations under this agreement and such failure renders the continued performance of this agreement impossible.

The amended and restated exclusive technical and consulting services agreement dated August 16, 2010 between 1Verge Internet and Jiaheyi is substantially similar to the exclusive technical

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and consulting services agreement described above, except that the services provided by 1Verge Internet are relevant to the advertising business and operations of Jiaheyi.

For the three years ended December 31, 2007, 2008 and 2009, and the nine months ended September 30, 2010, 1Verge Internet has received nil service fees under these amended and restated exclusive technical and consulting services agreements from 1Verge Information or Jiaheyi for the technical and consulting services provided as neither 1Verge Information nor Jiaheyi has yet to achieve profitability.

Amended and Restated Trademark License Agreement and Amended and Restated Domain Name License Agreement.    Pursuant to the amended and restated trademark license agreement and the amended and restated domain name license agreement dated August 16, 2010 between 1Verge Internet and 1Verge Information, 1Verge Internet grants a non-exclusive and non-transferable license, without sublicense rights, to 1Verge Information to use its trademarks and domain names. 1Verge Information may only use the trademarks and the domain names in its own business operations. The license fee under each agreement dated August 16, 2010 is 5% of the total revenue of the licensee and is to be paid every quarter within 15 days after the end of the quarter. Additionally, if the licensor believes that it would be helpful to the licensee’s business, the licensor may reduce or exempt the licensee from all or part of the license fee. The term of each agreement is ten years, and will be extended for another ten years with both parties’ consent. 1Verge Internet may terminate each agreement at any time by providing a 30 days prior written notice. Any party may terminate each agreement immediately with written notice to the other party if the other party materially breaches the relevant agreement and fails to cure its breach within 30 days from the date it receives written notice of its breach from the non-breaching party. The parties will review each agreement at three-month intervals and determine if any amendment is needed. For the three years ended December 31, 2007, 2008 and 2009, and the nine months ended September 30, 2010, 1Verge Internet has received nil license fees under these amended and restated trademark license and domain name license agreements from 1Verge Information for the trademark and domain name licenses as 1Verge Information has not yet to achieve profitability.

Agreements that Provide Us the Option to Purchase the Equity Interest in 1Verge Information and Jiaheyi

Amended and Restated Equity Option Agreements.    Pursuant to the amended and restated equity option agreement dated August 16, 2010 among 1Verge Internet and the shareholders of 1Verge Information, 1Verge Information’s shareholders grant 1Verge Internet or its designated representative(s) an exclusive option to purchase, to the extent permitted under PRC law, all or part of their equity interest in 1Verge Information in consideration for the loans extended to 1Verge Information’s shareholders under the amended and restated loan agreement mentioned below. In addition, 1Verge Internet has the option to acquire the equity interest at the lowest price then permitted by PRC law in consideration of the cancellation of all or part of the loans extended to 1Verge Information’s shareholders under the loan agreement. 1Verge Internet or its designated representative(s) have sole discretion to decide when to exercise such options, either in part or in full. 1Verge Internet or its designated representative(s) is entitled to exercise the options an unlimited number of times until all of the equity interests have been acquired, and can freely transfer the option, in whole or in part to any third party. Without 1Verge Internet’s consent, 1Verge Information’s shareholders shall not transfer, donate, pledge, or otherwise dispose of their equity shareholdings in any way. The equity option agreement will remain in full force and effect until the earlier of: (i) the date on which all of the equity interest in 1Verge Information has been acquired by 1Verge Internet or its designated representatives; or (ii) 1Verge Internet giving 30 days’ advance written notice of termination to the shareholders of 1Verge Information. The key factor for us to decide whether to exercise the option is whether the current regulatory restrictions on foreign investment in the value-added

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telecommunications services and advertising business will be relaxed in the future, the likelihood of which we are not able to predict. If such restrictions are relaxed, we will, through 1Verge Internet, exercise the option and purchase all or part of the equity interest in 1Verge Information and Jiaheyi.

The amended and restated equity option agreement dated August 16, 2010 among 1Verge Internet and shareholders of Jiaheyi contain terms substantially similar to the equity option agreement described above.

Amended and Restated Loan Agreements.    Under the loan agreement dated August 16, 2010 between 1Verge Internet and the shareholders of 1Verge Information, 1Verge Internet had made interest-free loans in several tranches with an aggregate amount of RMB20,000,000 to the shareholders of 1Verge Information solely for the initial capitalization and the subsequent financial requirements in 1Verge Information. The loans can be repaid only with the proceeds from the sale of all of the equity interest in 1Verge Information to 1Verge Internet or its designated representatives, pursuant to the amended and restated equity option agreement. The term of each loan is ten years from the first withdrawal of such loan by 1Verge Information’s shareholders, and will be automatically extended for another ten years unless terminated by written notice from 1Verge Internet to the shareholders of 1Verge Information three months prior to the due date.

The amended and restated loan agreement dated August 16, 2010 among 1Verge Internet and the shareholders of Jiaheyi contain terms substantially similar to the amended and restated loan agreement described above, except that the amount of loan extended to the shareholders of Jiaheyi is RMB100,000.

In the opinion of TransAsia Lawyers, our PRC legal counsel:

Ÿ the ownership structures of our consolidated affiliated entities and our subsidiary in China, both currently and after giving effect to this offering, comply with all existing PRC laws and regulations;

Ÿ the contractual arrangements among 1Verge Internet and our consolidated affiliated entities and their respective shareholders that are governed by PRC law are valid, binding and enforceable, and will not result in any violation of PRC laws or regulations currently in effect; and

Ÿ each of our PRC subsidiaries and each of our consolidated affiliated entities has all necessary corporate power and authority to conduct its business as described in its business scope under its business license. The business licenses of our PRC subsidiaries and each of our consolidated affiliated entities are in full force and effect. Each of our PRC subsidiaries and our consolidated affiliated entities is capable of suing and being sued and may be the subject of any legal proceedings in PRC courts. To the best of TransAsia’s knowledge after due inquires, none of our PRC subsidiaries, consolidated affiliated entities or their respective assets is entitled to any immunity, on the grounds of sovereignty, from any action, suit or other legal proceedings; or from enforcement, execution or attachment.

We have been advised by our PRC legal counsel, however, that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules. Accordingly, the PRC regulatory authorities may in the future take a view that is contrary to the above opinion of our PRC legal counsel. We have been further advised by our PRC counsel that if the PRC government finds that the agreements that establish the structure for operating our PRC online video and online advertising businesses do not comply with PRC government restrictions on foreign investment in value-added telecommunication services, we could be subject to severe penalties including being prohibited from continuing operations. See “Risk Factors—Risks Related to Our

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Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC governmental restrictions on foreign investment in Internet business, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations” and “Risk Factors—Risks Related to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us.”

PRC Regulations on Loans and Direct Investment by Offshore Holding Companies

We are an offshore holding company conducting our operations in China through our PRC

subsidiaries and consolidated affiliated entities. PRC regulations of loans and direct investment by offshore holding companies to PRC entities may limit our use of the proceeds we expect to receive from this offering. See “Risk Factors—Risks Related to Our Corporate Structure—PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may limit our use of the proceeds we receive from this offering to fund our expansion or operations.”

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SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial information for the periods and as of the dates indicated should be read in conjunction with our audited consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

Our selected consolidated financial data presented below for the years ended December 31, 2007, 2008 and 2009 and our balance sheet data as of December 31, 2008 and 2009 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. Our audited consolidated financial statements are prepared in accordance with U.S. GAAP and have been audited by Ernst & Young Hua Ming, an independent registered public accounting firm. We were incorporated in September 2005 and launched our website, www.youku.com, in December 2006. We have not included financial information for the period from inception (September 20, 2005) to December 31, 2005 and the year ended December 31, 2006, as such information is not available on a basis that is consistent with the consolidated financial information for the years ended December 31, 2007, 2008 and 2009, and cannot be provided on a U.S. GAAP basis without unreasonable effort or expense.

The selected consolidated statement of operations data for the nine months ended September 30, 2009 and 2010 and the selected consolidated balance sheet data as of September 30, 2010 have been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus and have been prepared on the same basis as our audited consolidated financial statements. The unaudited financial information includes all adjustments, consisting only of normal and recurring adjustments, that we consider necessary for a fair statement of our financial position and operating results for the periods presented. Our historical results do not necessarily indicate results expected for any future periods.

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	Year Ended December 31,									Nine Months Ended September 30,
	2007			2008			2009			2009			2010
	RMB			RMB			RMB			RMB			RMB			US$
	(in thousands, except for share and per share date)
										(Unaudited)			(Unaudited)			(Unaudited)
Consolidated Statement of Operations Data
Net revenues(1)		1,778			33,022			153,626			99,784			234,623			35,068
Cost of revenues(2)		(46,148	)		(171,130	)		(216,708	)		(157,684	)		(248,719	)		(37,175	)
Gross loss		(44,370	)		(138,108	)		(63,082	)		(57,900	)		(14,096	)		(2,107	)
Operating expenses(2):
Sales and marketing		(22,469	)		(35,086	)		(72,746	)		(46,485	)		(91,527	)		(13,680	)
Product development		(15,530	)		(15,398	)		(20,908	)		(15,003	)		(21,260	)		(3,178	)
General and administrative		(5,843	)		(14,367	)		(18,523	)		(13,043	)		(18,716	)		(2,797	)
Total operating expenses		(43,842	)		(64,851	)		(112,177	)		(74,531	)		(131,503	)		(19,655	)
Loss from operations		(88,212	)		(202,959	)		(175,259	)		(132,431	)		(145,599	)		(21,762	)
Interest income		1,013			5,384			2,054			1,840			1,068			160
Interest expense		—			(4,240	)		(6,835	)		(5,401	)		(4,963	)		(742	)
Amortization of debt issuance costs		—			(2,380	)		—			—			—			—
Change in fair value of derivative financial liabilities and warrant liability		(2,422	)		(264	)		(2,313	)		(357	)		(17,532	)		(2,620	)
Others, net		(62	)		(1	)		67			48			65			10
Loss from operations before income taxes		(89,683	)		(204,460	)		(182,286	)		(136,301	)		(166,961	)		(24,954	)
Income taxes		—			—			—			—			—			—
Net loss		(89,683	)		(204,460	)		(182,286	)		(136,301	)		(166,961	)		(24,954	)
Net loss per share:
Basic		(0.25	)		(0.56	)		(0.50	)		(0.37	)		(0.46	)		(0.07	)
Diluted		(0.25	)		(0.56	)		(0.50	)		(0.37	)		(0.46	)		(0.07	)
Net loss per ADS(3):
Basic
Diluted
Weighted-average ordinary shares outstanding:
Basic		365,011,250			365,134,375			365,432,916			365,268,611			365,675,115			365,675,115
Diluted		365,011,250			365,134,375			365,432,916			365,268,611			365,675,115			365,675,115
Pro forma net loss per share:
Basic								(0.13	)					(0.11	)		(0.02	)
Diluted								(0.13	)					(0.11	)		(0.02	)
Pro forma weighted-average ordinary shares outstanding:
Basic								1,454,990,172						1,555,698,080			1,555,698,080
Diluted								1,454,990,172						1,555,698,080			1,555,698,080
Selected non-GAAP Financial Data
Adjusted revenues(4)		1,778			39,401			191,492			122,545			288,511			43,122
Adjusted net loss(4)		(86,012	)		(200,531	)		(175,408	)		(132,696	)		(142,054	)		(21,232	)

(1) Net revenues are presented net of commissions earned by third-party advertising agencies, as the term is defined on page 7, as set forth below:

	Year Ended December 31,						Nine Months Ended September 30,
	2007		2008		2009		2009		2010
	RMB		RMB		RMB		RMB		RMB		US$
	(in thousands)
							(Unaudited)		(Unaudited)		(Unaudited)
Commissions earned by third-party advertising agencies		—		6,379		37,866		22,761		53,888		8,054

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(2) Including share-based compensation expenses as set forth below:

	Year Ended December 31,						Nine Months Ended September 30,
	2007		2008		2009		2009		2010
	RMB		RMB		RMB		RMB		RMB		US$
	(in thousands)
							(Unaudited)		(Unaudited)		(Unaudited)
Allocation of Share-based Compensation Expenses
Cost of revenues		—		259		283		206		550		82
Product development		684		1,401		1,657		1,206		2,038		305
Sales and marketing		141		861		1,690		1,161		3,645		545
General and administrative		424		1,144		935		675		1,142		170
Total		1,249		3,665		4,565		3,248		7,375		1,102

(3) Each ADS represents              Class A ordinary shares.

(4) We define adjusted revenues, a non-GAAP financial measure, as the sum of net revenues and commissions earned by third-party advertising agencies, as the term is defined on page 7. We define adjusted net loss, a non-GAAP financial measure, as net loss excluding share-based compensation expenses and change in fair value of derivative financial liabilities and warrant liability. We review adjusted revenues and adjusted net loss together with net revenues and net loss to obtain a better understanding of our operating performance. We also believe it is useful supplemental information for investors and analysts to assess our operating performance with the effect of commissions earned by third-party advertising agencies, as the term is defined on page 7, and without the effect of non-cash share-based compensation expenses and change in fair value of derivative financial liabilities and warrant liability, which have been and will continue to be significant recurring factors in our business. However, the use of adjusted revenues and adjusted net loss has material limitations as an analytical tool. One of the limitations of using non-GAAP adjusted revenues is that it excludes an item that is not typically excluded from net revenues. One of the limitations of using non-GAAP adjusted net loss is that it does not include all items that impact our net loss for the period. In addition, because adjusted revenues and adjusted net loss are not calculated in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider adjusted revenues and adjusted net loss in isolation from or as an alternative to net revenues and net loss, respectively, prepared in accordance with U.S. GAAP. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

	Year Ended December 31,									Nine Months Ended September 30,
	2007			2008			2009			2009			2010
	RMB			RMB			RMB			RMB			RMB			US$
	(in thousands)
Net revenues		1,778			33,022			153,626			99,784			234,623			35,068
Add back: Commissions earned by third-party advertising agencies		—			6,379			37,866			22,761			53,888			8,054
Adjusted revenues		1,778			39,401			191,492			122,545			288,511			43,122
Net loss		(89,683	)		(204,460	)		(182,286	)		(136,301	)		(166,961	)		(24,954	)
Add back: share-based compensation expenses		1,249			3,665			4,565			3,248			7,375			1,102
Add back: change in fair value of derivative financial liabilities and warrant liability		2,422			264			2,313			357			17,532			2,620
Adjusted net loss		(86,012	)		(200,531	)		(175,408	)		(132,696	)		(142,054	)		(21,232	)

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	As of December 31,						As of September 30,
	2008			2009			2010						2010
	RMB			RMB			RMB			US$			RMB		US$
	(in thousands)
													Pro Forma(1)
							(Unaudited)						(Unaudited)
Consolidated Balance Sheet Data:
Cash and cash equivalents		88,915			301,608			440,554			65,848			440,554		65,848
Total current assets		228,600			384,322			632,538			94,543			632,538		94,543
Total assets		291,746			441,741			738,798			110,426			738,798		110,426
Total current liabilities		60,159			132,479			260,042			38,870			260,042		38,870
Total liabilities		92,115			146,754			281,833			42,127			281,833		42,127
Convertible redeemable preferred shares		507,614			780,599			1,102,325			164,759			—		—
Total equity (deficit)		(307,983	)		(485,612	)		(645,360	)		(96,460	)		456,965		68,299

(1) Pro forma basis reflects the conversion of all outstanding preferred shares on a 1-for-1 basis into an aggregate of 1,190,022,965 ordinary shares as of September 30, 2010.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the section headed “Selected Consolidated Financial Data” and our consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.

Overview

We are the leading Internet television company in China. Our Internet television platform enables consumers to search, view and share high-quality video content quickly and easily across multiple devices. We believe our continuous focus on offering a superior user experience has enabled us to become the largest Internet television company in China and elevated our Youku brand to be the most recognized online video brand in China according to a 2010 survey conducted by an affiliate of the Chinese Academy of Sciences. According to iResearch, we had 40% market share in terms of total user time spent viewing online videos in China during the second quarter of 2010, while our closest competitor accounted for approximately 23% market share during the same period. In 2009, we had an implied market share of approximately 14% in terms of online video advertising spend in China, based on iResearch’s estimated data of total online video advertising spend in China.

We currently operate our business as a single segment. We derive substantially all of our revenues from online advertising services. Our advertising solutions present brand advertisers with attractive opportunities to combine the visual impact and engagement of traditional television-like multimedia advertisements with the interactivity and precise targeting capabilities of the Internet. We believe our differentiated sales proposition has contributed to the rapid increase in the number of international and domestic brands that advertise on our Internet television platform. We also participate in affiliate advertising programs run by third-party Internet search companies, which place links to their customers’ advertisements on our website.

As is customary in the advertising industry in China, we offer commissions to third-party advertising agencies who purchase our advertising services and recognize revenues net of these commissions. Our net revenues increased from RMB1.8 million in 2007 to RMB33.0 million in 2008 and to RMB153.6 million in 2009, and increased from RMB99.8 million in the nine months ended September 30, 2009 to RMB234.6 million (US$35.1 million) in the nine months ended September 30, 2010. The number of our brand advertisers increased from 7 in 2007 to 141 in 2008 and to 303 in 2009, and from 230 in the nine months ended September 30, 2009 to 343 in the nine months ended September 30, 2010. Net revenues derived from brand advertising sales have grown significantly over the years and accounted for 65.2%, 89.0%, 91.6% and 94.9% of our total net revenues in 2007, 2008, 2009 and the nine months ended September 30, 2010, respectively. We incurred net losses of RMB89.7 million, RMB204.5 million, RMB182.3 million and RMB167.0 million (US$25.0 million) in 2007, 2008, 2009 and the nine months ended September 30, 2010, respectively. The increase in net losses from RMB136.3 million in the nine months ended September 30, 2009 to RMB167.0 million (US$25.0 million) in the nine months ended September 30, 2010 was primarily due to the increases in our sales and marketing efforts, content costs and bandwidth costs. We expect our net losses to decrease as a percentage of our total net revenues in the foreseeable future.

Our results of operations are affected by the PRC laws, regulations and policies relating to online video and advertising businesses. Due to current legal restrictions on foreign ownership and

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investment in value-added telecommunications services and advertising businesses in China, we rely on a series of contractual arrangements with 1Verge Information and Jiaheyi to conduct most of our business, though in the future we intend to conduct our advertising agency business through our newly acquired subsidiary, Jet Brilliant Beijing. We do not hold equity interests in 1Verge Information and Jiaheyi. As a result of these contractual arrangements, we are the primary beneficiary of 1Verge Information and Jiaheyi and treat them as consolidated affiliated entities under U.S. GAAP. In the opinion of TransAsia Lawyers, our PRC legal counsel, the ownership structures of our consolidated affiliated entities, both currently and after giving effect to this offering, do not violate, breach, contravene or conflict with any applicable PRC laws or regulations. However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations related to such ownership structures. See “Risk Factors—Risks Related to Our Corporate Structure” and “Risk Factors—Risks Related to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us.”

Selected Statements of Operations Items

Net Revenues

We currently derive substantially all of our net revenues from online advertising services. Our online advertising sales consist of brand advertising services and affiliate advertising programs, which accounted for approximately 91.6% and 6.3%, respectively, of our net revenues in 2009 and approximately 94.9% and 3.3%, respectively, of our net revenues in the nine months ended September 30, 2010. As is customary in the advertising industry in China, we offer commissions to third-party advertising agencies and recognize revenues net of these commissions. We also derive a minimal portion of our net revenues from other sources, such as our web-based and wireless subscription video services, and sub-licensing fees from authorized sub-licensing of content which we license from content provider the exclusive rights for self-use and sub-licensing for online distribution to other online video websites. Such other revenues accounted for approximately 2.1% of our net revenues in 2009 and approximately 1.8% of our net revenues in the nine months ended September 30, 2010, respectively. The following table sets forth the principal components of our net revenues by amount and as a percentage of our total net revenues for the periods presented.

	Year Ended December 31,												Nine Months Ended September 30,
	2007				2008				2009				2009				2010
	RMB		%		RMB		%		RMB		%		RMB		%		RMB		US$		%
	(in thousands, except for percentages)
													(Unaudited)				(Unaudited)		(Unaudited)
Brand advertising revenues(1)		1,160		65.2		29,376		89.0		140,716		91.6		91,565		91.8		222,691		33,285		94.9
Affiliate advertising program revenues		618		34.8		3,626		11.0		9,747		6.3		6,672		6.7		7,779		1,163		3.3
Other revenues		—		—		20		*		3,163		2.1		1,547		1.5		4,153		620		1.8
Net revenues(1)		1,778		100.0		33,022		100.0		153,626		100.0		99,784		100.0		234,623		35,068		100.0

* Amount less than 0.1.

(1) Net revenues are presented net of commissions earned by third-party advertising agencies, as the term is defined on page 7, as set forth below:

	Year Ended December 31,						Nine Months Ended September 30,
	2007		2008		2009		2009		2010
	RMB		RMB		RMB		RMB		RMB		US$
	(in thousands)
							(Unaudited)		(Unaudited)		(Unaudited)
Commissions earned by third-party advertising agencies		—		6,379		37,866		22,761		53,888		8,054

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Brand Advertising.    We derive our revenues primarily from brand advertising sales. We provide in-video, display, sponsorships and other forms of advertising solutions on our website to a broad base of brand advertisers, including leading international and domestic companies in various industries. We derived a majority of our brand advertising revenues from in-video advertisements. Advertisers purchase our online advertising services primarily through third-party advertising agencies, and the number of our advertisers increased significantly from 7 in 2007 to 303 in 2009, and from 230 in the nine months ended September 30, 2009 to 343 in the nine months ended September 30, 2010. We price our advertising services based on various factors, including the form of third-party advertising, the specific targeting requirements, the duration of the time slot purchased and popularity of the content in which the advertisements will be placed. Prices for the aggregate time slots purchased by each advertiser or advertising agency are fixed under sales contracts, typically at a discount to our list prices. We review and adjust our list prices annually.

Net revenues derived from brand advertising sales grew significantly in the past and accounted for 65.2%, 89.0%, 91.6% and 94.9% of our net revenues in 2007, 2008, 2009 and the nine months ended September 30, 2010, respectively. The increase in such revenues from 2007 to the three quarters of 2010 was attributable to an increase in the number of advertisers and rising average spend per advertiser. We expect our brand advertising revenues to continue to grow as we focus on expanding our advertiser base and increasing the advertising spend of key advertisers.

The most significant factors that directly or indirectly affect our brand advertising sales revenues include the following:

Ÿ the number of users visiting our website and the amount of time they spend on our website;

Ÿ the amount of total online video advertising budgets of advertisers;

Ÿ the number of brand advertisers;

Ÿ the list prices of our advertising services and the discount we offer to customers;

Ÿ the commissions earned by third-party advertising agencies; and

Ÿ the evolving perception of the increasing effectiveness of online video advertising as compared to advertising in more traditional media, particularly television.

Affiliate Advertising Programs.    We participate in affiliate advertising programs run by third-party Internet search companies Baidu and Google. Under these programs, the third-party Internet search companies place links to their customers’ advertisements on our website and these advertisements are related to the video content or search queries on our website. Our share of their revenues is contractually negotiated and varies depending on calculations that take into account the amount of user traffic and the number of user clicks on these advertisements that appear on our website. Net revenues derived from these affiliate advertising programs as a percentage of our total net revenues decreased from 34.8% in 2007 to 6.3% in 2009 and to 3.3% in the nine months ended September 30, 2010, and are expected to continue to decrease over time relative to our brand advertising revenues.

Other Revenues.    We seek to diversify our revenue sources over time by expanding our wireless and web-based subscription services and other product offerings. We trial-launched our subscription-based online video services in early 2010, enabling users to watch advertisement-free premium content, such as high-definition movies. We are testing our platform to allow users to access live, streaming events, such as concerts, on a pay-per-view basis. In addition, we cooperate with China’s major mobile phone manufacturers to develop and pre-install our Youku software client on a variety of major 3G mobile phones to allow users to enjoy wireless video services. Though we currently derive minimal revenues from subscription-based and pay-per-view services, we seek to grow these

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businesses over time. We license from content providers the exclusive rights for both self-use and sub-licensing of certain content. We sub-license such content within its authorized sub-licensing scope to other video websites and receive sub-licensing fees from such websites. Our other revenues accounted for nil, less than 0.1% , 2.1% and 1.8% of our net revenues in 2007, 2008, 2009 and the nine months ended September 30, 2010, respectively. Moreover, we are working with e-commerce companies, such as Taobao, to provide video-enabling merchandise demonstration services to their premium retail members. We share revenues with the e-commerce companies for the service fees they charge their members.

Cost of Revenues

Cost of revenues consists primarily of (i) bandwidth costs, (ii) depreciation of our servers and other equipment, (iii) content costs, and (iv) business tax and surcharges. The following table sets forth the components of our cost of revenues for the periods indicated.

	Year Ended December 31,									Nine Months Ended September 30,
	2007			2008			2009			2009			2010
	RMB			RMB			RMB			RMB			RMB			US$
	(in thousands)
										(Unaudited)			(Unaudited)			(Unaudited)
Net revenues		1,778			33,022			153,626			99,784			234,623			35,068
Cost of revenues:
Bandwidth costs		(35,733	)		(131,926	)		(149,479	)		(111,299	)		(139,994	)		(20,924	)
Depreciation of servers and other equipment		(7,155	)		(25,364	)		(33,692	)		(24,506	)		(29,008	)		(4,336	)
Content costs		(3,109	)		(10,335	)		(16,913	)		(11,269	)		(56,476	)		(8,441	)
Business tax and surcharges		(151	)		(3,505	)		(16,624	)		(10,610	)		(23,241	)		(3,474	)
Total cost of revenues		(46,148	)		(171,130	)		(216,708	)		(157,684	)		(248,719	)		(37,175	)

Bandwidth Costs.    Bandwidth costs are the fees we pay to telecommunications carriers and other service providers for telecommunications services and for hosting our servers at their Internet data centers. Bandwidth is a significant component of our cost of revenues and therefore an important factor affecting our profitability. We expect our bandwidth costs to increase on an absolute basis as traffic to our website grows. However, we expect our bandwidth costs as a percentage of our net revenues to decrease over time, consistent with historical trends of decreasing unit cost of data hosting and transmission services.

Depreciation of Servers and Other Equipment.    We include depreciation expense for servers and other equipment that are directly related to our business operations and technical support in our cost of revenues. Our depreciation expense increased significantly from 2007 to 2009 and from the nine months ended September 30, 2009 to the nine months ended September 30, 2010 as we made substantial investments in building out our CDN infrastructure during this period. We expect our depreciation expense to increase on an absolute basis as we continue to invest in additional servers and other equipment. However, we expect our depreciation expense as a percentage of our net revenues to decrease over time since we made substantial upfront capital expenditures at an early stage of our development that are not expected to increase as quickly as our net revenues.

Content Costs.    Content costs consist of fees we pay to license content from copyright owners or content distributors, salaries and benefits for our content team, as well as costs of our self-produced content. Our content costs increased significantly from 2007 to 2009 and from the nine months ended September 30, 2009 to the nine months ended September 30, 2010 as we built a large and comprehensive online video content library during this period. The increase in content cost since the

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second half of 2009 was also due to a substantial increase in unit acquisition cost of professionally produced content, such as licensing fees for television serial dramas and movies. According to our internal records, the average license fee for television serial drama has increased in 2009 by more than 200% as compared to 2008, and such fee has increased in 2010 to date by more than 100% as compared to 2009. The average license fee for movies has also increased in 2010 to date by more than 90% as compared to 2009. The term of licenses for our professionally produced content generally ranges from one to five years. The average term of licenses varies depending on the types of content, with movies and television serial dramas each having an average term of approximately 2.5 years and 2 years, respectively. We expect our content costs to grow on an absolute basis as we expand our content library and market prices for professionally produced content increase.

Business Tax and Surcharges.    Our subsidiaries and consolidated affiliated entities are subject to business tax and surcharges on the revenues generated from our services rendered in China. The effective rate of the aggregate amount of business tax, surcharges and cultural development fees on our revenues before deduction of commissions earned by third-party advertising agencies is approximately 8.5% per year.

Our cost of revenues includes share-based compensation charges. See “—Critical Accounting Policies—Share-Based Compensation Expenses.”

Operating Expenses

Our operating expenses consist of (i) sales and marketing expenses, (ii) product development expenses, and (iii) general and administrative expenses. We expect our operating expenses as a percentage of our net revenues to decrease over time due to an expected higher growth rate for our net revenues. The following table sets forth the components of our operating expenses for the periods indicated.

	Year Ended December 31,									Nine Months ended September 30, 2010,
	2007			2008			2009			2009			2010
	RMB			RMB			RMB			RMB			RMB			US$
	(in thousands)
										(Unaudited)			(Unaudited)			(Unaudited)
Sales and marketing		(22,469	)		(35,086	)		(72,746	)		(46,485	)		(91,527	)		(13,680	)
Product development		(15,530	)		(15,398	)		(20,908	)		(15,003	)		(21,260	)		(3,178	)
General and administrative		(5,843	)		(14,367	)		(18,523	)		(13,043	)		(18,716	)		(2,797	)
Total operating expenses		(43,842	)		(64,851	)		(112,177	)		(74,531	)		(131,503	)		(19,655	)

Sales and Marketing Expenses

Sales and marketing expenses consist primarily of salaries and benefits and commissions for our sales and marketing personnel and marketing and promotional expenses. Our sales and marketing expenses increased significantly from 2007 to 2009 and from the nine months ended September 30, 2009 to the nine months ended September 30, 2010 primarily reflecting the rapid expansion of our sales team and our increased spending on marketing and brand promotional activities. We expect that our sales and marketing expenses will increase in absolute amount in the near term as we expect to hire additional sales personnel and invest in brand enhancement efforts.

Product Development Expenses

Product development expenses consist primarily of salaries and benefits for product development personnel. We expect our product development expenses on an absolute basis to increase as we intend to hire additional product development personnel to further expand our technology platform, enhance user experience and support the expected growth of our business.

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General and Administrative Expenses

General and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel. Our general and administrative expenses increased from 2007 to 2009 and from the nine months ended September 30, 2009 to the nine months ended September 30, 2010 as our business expanded, including the hiring of additional management and administrative staff. We expect our general and administrative expenses to increase in the future as our business grows and we incur increased costs related to complying with our compliance and reporting obligations under the U.S. securities laws as a public company.

Our operating expenses include share-based compensation charges. See “—Critical Accounting Policies—Share-Based Compensation Expenses.”

Taxation

Cayman Islands

We are incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, we are not subject to income or capital gains tax. In addition, dividend payments are not subject to withholding tax in the Cayman Islands.

Hong Kong

Our wholly-owned subsidiary in Hong Kong, Jet Brilliant, is subject to Hong Kong profits tax on its activities conducted in Hong Kong. No provision for Hong Kong Profits tax has been made in the consolidated financial statements as Jet Brilliant has no assessable income for the nine months ended September 30, 2010. Dividends from our Hong Kong subsidiary to us are exempt from withholding tax.

PRC

Prior to the effective date of the New EIT Law on January 1, 2008, enterprises in China were generally subject to an enterprise income tax at a statutory rate of 33% unless they qualified for certain preferential treatment. Effective as of January 1, 2008, the New EIT Law applies a uniform enterprise income tax rate of 25% to all domestic enterprises and foreign-invested enterprises and defines new tax incentives for qualifying entities. Enterprises established before March 16, 2007 that were entitled to the then available preferential tax treatment may continue to enjoy such treatment (i) in the case of preferential tax rates, for a maximum of a five-year period starting from January 1, 2008; during such period, the tax rate will gradually increase to 25%, or (ii) in the case of preferential tax exemption or reduction for a specified term, until the expiration of such term.

1Verge Information, a company incorporated in PRC and a consolidated affiliated entity of which 1Verge Internet is the primary beneficiary, is located in the Beijing Zhongguancun Science Park and was granted “High and New Technology Enterprise” status and was entitled to a preferential income tax rate of 15% from January 1, 2006 to December 31, 2007 and is entitled to the same preferential income tax rate from January 1, 2010 to December 31, 2011. The high and new technology enterprise status is subject to approval and renewal every three years. Jiaheyi is our other consolidated affiliated entity and carries on no material operational activities.

In addition, the New EIT Law treats enterprises established outside of China that have “effective management and control” located in China as a PRC resident enterprise for tax purposes. The term “effective management and control” is generally defined as exercising overall management and control over the business, personnel, accounting, properties of an enterprise. We believe that neither Youku.com Inc. nor Jet Brilliant should be treated as a “resident enterprise” for PRC tax purposes. See “Regulations—Regulations on Tax—PRC Enterprise Income Tax.” However, if considered a “PRC resident enterprise” for tax purposes, our company would be subject to the PRC enterprise income tax

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at a rate of 25% on its worldwide income. We will continue to monitor our tax status. See “Risk Factors—Risks Related to Doing Business in China—Our global income and the dividends that we may receive from our PRC subsidiaries may be subject to PRC taxes under the PRC Enterprise Income Tax Law, which would have a material adverse effect on our results of operations.”

Under the New EIT Law and its implementation rules, dividends from our PRC subsidiaries out of earnings generated after January 1, 2008 are subject to withholding tax. Distributions of earnings generated before January 1, 2008 are exempt from PRC withholding tax. Dividends of 1Verge Internet, which is our PRC subsidiary directly held by our company, to our company is subject to withholding tax at a rate of 10%. Dividends of Jet Brilliant Beijing, which is our PRC subsidiary directly held by our Hong Kong subsidiary Jet Brilliant, will, upon approval from the local tax authority, benefit from a reduced withholding tax rate of 5% under the Arrangement between the PRC and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and Capital. However, if our Hong Kong subsidiary is not considered to be the beneficial owner of any such dividends, such dividends would be subject to withholding tax at a rate of 10% rather than a preferential rate of 5%. Jet Brilliant has not obtained the approval for a withholding tax rate of 5% from the local tax authority and does not plan to obtain such approval in the near future, because Jet Brilliant Beijing has paid nil dividends from April 27, 2010 to September 30, 2010 and does not plan to pay dividends in the future as it may continue to incur losses. See “Risk Factors—Risks Related to Doing Business in China—Our global income and the dividends that we may receive from our PRC subsidiaries may be subject to PRC taxes under the PRC Enterprise Income Tax Law, which would have a material adverse effect on our results of operations.”

For more information on PRC tax regulations, see “Regulation—Regulations on Tax.”

Internal Control over Financial Reporting

In preparing our consolidated financial statements, we and our independent registered public accounting firm identified material weaknesses and other deficiencies in our internal control over financial reporting as of December 31, 2009. As defined in standards established by the PCAOB, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses identified related to an insufficient number of financial reporting personnel with an appropriate level of knowledge, experience and training in the application of U.S. GAAP and SEC regulations in internal control over our financial reporting obligations, a lack of qualified staff to support our chief financial officer in financial reporting activities, a lack of an appropriate level of oversight and communication of internal control, policies and procedures to support our activities, and a lack of effective monitoring activities to ensure the accuracy and completeness of our financial statements and related disclosures. Neither we nor our independent registered public accounting firm undertook a comprehensive assessment of our internal control for purposes of identifying and reporting material weaknesses and other control deficiencies in our internal control over financial reporting, as we and they will be required to do once we become a public company. Had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional control deficiencies may have been identified.

Following the identification of these material weaknesses and other control deficiencies and in connection with preparation of our consolidated financial statements, we performed additional review procedures, including a thorough review of journal entries and reconciliations for key accounts, to ensure the completeness and accuracy of the consolidated financial statements prepared in accordance with U.S. GAAP.

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To remedy our control deficiencies, we have adopted several measures to improve our internal control over financial reporting. As part of our efforts to address the identified material weaknesses and other control deficiencies, in September 2010, we appointed a financial director who is a certified public accountant with U.S. GAAP expertise and work experience in the financial reporting function of a publicly listed company for approximately four years. We also appointed an internal audit director with prior U.S. GAAP accounting and internal control assessment experience in October 2010. We have started to provide, and intend to continue to provide, on-going training to our existing financial reporting personnel on the accounting and reporting requirements under the U.S. GAAP and SEC regulations. We are in the process of, among other things, (i) actively searching for candidates for additional financial and accounting personnel, including additional associates to support our chief financial officer in financial reporting activities; (ii) establishing processes and oversight measures with the assistance of an independent third-party consultant we engaged in July 2010 in an effort to comply with the requirements under the U.S. GAAP, SEC regulations and Section 404; (iii) developing and implementing an accounting policy manual; and (iv) establishing effective monitoring and oversight controls to ensure the accuracy and completeness of our financial statements and related disclosures. We expect to complete the measures above as soon as practicable upon the completion of this offering and will continue to implement measures to remedy our internal control deficiencies in order to meet the deadline imposed by Section 404. However, the implementation of these measures may not fully address the deficiencies in our internal control over financial reporting. We are not able to estimate with reasonable certainty the costs that we will need to incur to implement these and other measures designed to improve our internal control over financial reporting. See “Risk Factors—Risks Related to Our Business and Industry—In preparing our consolidated financial statements, we have identified material weaknesses and other control deficiencies in our internal control over financial reporting. If we fail to maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud, and investor confidence in our company and the market price of our ADSs may be adversely affected.”

Critical Accounting Policies

We prepare our financial statements in conformity with U.S. GAAP, which requires us to make estimates and assumptions that affect our reporting of, among other things, assets and liabilities, contingent assets and liabilities and net revenues and expenses. We regularly evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and other factors that we believe to be relevant under the circumstances. Since our financial reporting process inherently relies on the use of estimates and assumptions, our actual results could differ from what we expect. This is especially true with some accounting policies that require higher degrees of judgment than others in their application. We consider the policies discussed below to be critical to an understanding of our audited consolidated financial statements because they involve the greatest reliance on our management’s judgment.

Revenue Recognition

We derive revenues primarily from online advertising services. We recognize revenues only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the related fee is reasonably assured. Specifically, we recognize revenues based on the following revenue recognition principles:

For online advertising services we provide to brand advertisers, advertising contracts are signed to establish the fixed price and advertising services to be provided. Pursuant to the advertising contracts, we provide advertisement placements on our web pages in different formats, including but not limited to video, banners, links, logos and buttons. Before entering into an advertising contract, we make a credit assessment of the advertiser to evaluate the collectability of the related service fees

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under the contract. For those contracts the collectability of which was assessed as not reasonably assured, we recognize revenues only when the cash payments were received and all revenue recognition criteria were met. For contracts where we provide customers with marketing services that contain multiple deliverables, such as advertisements in different formats to be delivered over different periods of time, since we sell the marketing services over a broad price range, there is a lack of objective and reliable evidence of fair value for each deliverable included in the arrangement, and depending on the nature of customer arrangement, revenues may be contingent upon the delivery of undelivered items. Accordingly, a combined unit of accounting is used pursuant to Accounting Standards Codification 605-25 Revenue Recognition: Multiple-Element Arrangements, and such revenues are recognized ratably over the performance period of the last deliverable in the arrangement. Revenue is deferred when non-refundable payments are received from customers prior to satisfaction of the revenue recognition criteria discussed above.

We participate in affiliate advertising programs run by third parties and place links to their customers’ advertisements on our website. On a monthly basis, we obtain data on the user traffic and the number of visitors’ clicks from these third parties. Under these programs, we recognize revenues based on contractual rates applied to user traffic and the number of visitors’ clicks on the advertisements on our website.

For advertising-for-advertising barter transactions, which are cross-promotional activities we enter into with third parties, we follow Accounting Standards Codification subtopic 605-20, which provides that advertising-for-advertising barter transactions should be recorded at fair value only if the value of such advertising surrendered in the transaction is determinable within reasonable limits. We do not recognize revenues for such barter transactions since the fair value is not determinable for any of the periods presented.

Share-based Compensation Expenses

On December 1, 2005, we adopted our 2006 Stock Option Scheme, or the Plan, to attract and retain the best personnel and provide additional incentives to employees, directors, officers, directors, advisors or consultants of the company. We amended the Plan on March 26, 2007, June 20, 2008, December 16, 2009 and September 9, 2010, respectively. Our board of directors authorized the issuance and reservation of up to 140,441,231 ordinary shares on December 16, 2009 under the Plan. As of September 30, 2010, options to purchase 128,751,901 ordinary shares were outstanding. The following table sets forth the options granted under the Plan that were outstanding as of September 30, 2010.

Date of Option Grant	Options Outstanding		Exercise Price		Weighted-average Fair Value of Option		Fair Value of Ordinary Shares
			(US$)		(US$)		(US$)
Prior to 2009		70,288,834
February 1, 2009		9,180,000		0.143036134		0.0511		0.1048
February 21, 2009		200,000		0.143036134		0.0513		0.1056
August 1, 2009		9,854,667		0.143036134		0.0575		0.1143
February 1, 2010		19,505,400		0.190850707		0.1062		0.1849
August 1, 2010		19,723,000		0.40		0.2005		0.3855
Total:		128,751,901

On November 10, 2010, we granted options to purchase 11,487,000 ordinary shares of our company at an exercise price of US$0.48 per share under the Plan to some of our directors and employees. In determining the fair value of our ordinary shares underlying the options granted on November 10, 2010, we intend to use the mid-point of the estimated initial public offering price range shown on the front cover of this prospectus adjusted to reflect the ADS-to-ordinary share ratio and apply

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a 10% discount for lack of marketability to reflect the fact that there was no public market for our shares as we were a closely held private company as of the option grant date. As of November 12, 2010, options to purchase a total of 139,520,233 ordinary shares were outstanding.

Share-based compensation expense for all share-based awards granted to employees is determined based on fair value of the shares on the grant date. Share-based compensation is expensed ratably on a straight-line basis for awards with vesting schedules based on service conditions only over the requisite service period, which is generally the vesting term of the share-based awards.

We engaged American Appraisal China Limited, or American Appraisal, an independent third-party appraiser, to assist us in our determination of the fair value of our equity securities as of February 1, 2009, February 21, 2009, August 1, 2009, February 1, 2010 and August 1, 2010. Our management is ultimately responsible for such determination.

In determining the fair value of our stock options, the binomial lattice option pricing model was applied. The key assumptions used to determine the fair value of the options at the relevant grant dates in 2009 and 2010 were as follows:

	Year Ended 2009		Nine Months Ended September 30, 2010
Risk-free interest rate		3.26% to 3.98%		2.96% to 4.41%
Expected volatility rate		65.40% to 66.40%		61.8% to 63%
Expected dividend yield		0.00%		0.00%
Sub-optimal early exercise factor		2 times		2 times

The risk-free interest rate for periods within the contractual life of an option is based on the U.S. Treasury yield curve in effect at the time of grant. The volatility of the underlying ordinary shares during the life of the options was estimated with reference to historical volatilities of several comparable companies. The dividend yield was estimated based on our expected dividend policy over the expected term of the options. We are required to estimate forfeitures at the time of grant and record share-based compensation expenses only for those awards that are expected to vest. If actual forfeitures differ from these estimates, we may need to revise the estimates used in subsequent periods.

If factors change and we employ different assumptions for estimating share-based compensation expenses in future periods or if we decide to use a different valuation model, our share-based compensation expenses in future periods may differ significantly from what we have recorded in prior periods and could materially affect our operating income, net income and net income per share.

The binomial lattice option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable, which are characteristics not present in our option grants. Existing valuation models, including the Black-Scholes and binomial lattice models, may not provide reliable measures of the fair value of our share-based compensation. Consequently, there is a risk that our estimates of the fair values of our share-based compensation awards on the grant dates may be significantly different from the actual values realized upon the exercise, expiration, early termination or forfeiture of those share-based payments in the future. Certain share-based compensation awards, such as employee share options, may expire worthless or otherwise result in zero intrinsic value as compared to the fair value originally estimated on the grant date and reported in our financial statements. Alternatively, values that are significantly higher than fair values originally estimated on the grant date and reported in our financial statements may be realized from these instruments. There is currently no market-based mechanism or other practical application to verify the reliability and accuracy of the estimates stemming from these valuation models, nor is there a means to compare and adjust the estimates to actual values.

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As a private company with no quoted market in our ordinary shares, we need to estimate the fair value of our ordinary shares at the relevant grant dates. The determination of the fair value of our ordinary shares requires complex and subjective judgments to be made regarding our projected financial and operating results, our unique business risks, the liquidity of our shares and our operating history and prospects at the time of each grant.

In determining the fair values of our ordinary shares as of each award grant date in 2009 and 2010, three generally accepted approaches to value were considered: cost, market and income approaches. While useful for certain purposes, the cost approach is generally not considered applicable to the valuation of a company as a going concern, as it does not capture the future earning potential of the business. The comparability of our peer companies’ financial metrics and the relevance of the market approach were also considered low since our target market and stage of development are different from those of the publicly listed companies in the same industry. In view of the above, we determined that the income approach is the most appropriate method to derive the fair values of our ordinary shares. In addition, we took into consideration of the guidance prescribed by the American Institute of Certified Public Accountants (AICPA) Audit and Accounting Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, or the Practice Aid.

The income approach involves applying appropriate discount rates to estimated cash flows that are subject to a number of assumptions. These assumptions include: no material changes in the existing political, legal, fiscal and economic conditions in China; our ability to recruit and retain competent management, key personnel and technical staff to support our ongoing operations; and no material deviation in industry trends and market conditions from economic forecasts. These assumptions are inherently uncertain and subjective. The risks associated with achieving the estimated cash flow were assessed in selecting the appropriate discount rates, which had been determined to be 27% on February 1, 2009, February 21, 2009 and August 1, 2009, 22% on February 1, 2010 and 18% on August 1, 2010. The discount rates were based on the estimated market required rate of return for investing in our company, or weighted average cost of capital, or WACC, which was derived by using the Capital Asset Pricing Model, a method that market participants commonly use to price securities. The change in WACC was the combined result of the changes in the risk-free rate, industry-average correlated relative volatility coefficient beta, equity risk premium, size of our company, scale of our business and our ability in achieving forecast projections.

A discount for lack of marketability, or DLOM, was also applied to reflect the fact that there is no ready public market for our shares as we are a closely held private company. When determining the discount for lack of marketability, the Black-Scholes option model was used. Under the option-pricing method, the cost of the put option, which can hedge the price change before the privately held shares can be sold, was considered as a basis to determine the discount for lack of marketability. Based on the analysis, DLOM of 25% was used for the valuation of our ordinary shares on February 1, 2009, February 21, 2009, August 1, 2009 and February 1, 2010, and DLOM of 9% was used on August 1, 2010.

The option-pricing method was used to allocate equity value of our company to preferred and ordinary shares, taking into account the guidance prescribed by the Practice Aid. This method involves making estimates of the anticipated timing of a potential liquidity event, such as a sale of our company or an initial public offering, and estimates of the volatility of our equity securities. The anticipated timing is based on the plans of our board and management. Estimating the volatility of the share price of a privately held company is complex because there is no readily available market for the shares. The volatility of our shares was estimated based on the historical volatility of comparable listed companies’ shares. Had we used different estimates of volatility, the allocations between preferred and ordinary shares would have been different.

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The fair value of our ordinary shares was US$0.1048 per share on February 1, 2009, US$0.1056 per share on February 21, 2009 and US$0.1143 per share on August 1, 2009. This increase was primarily attributable to the organic growth of our business.

The fair value of our ordinary shares increased from US$0.1143 on August 1, 2009 to US$0.1849 on February 1, 2010. The increase was primarily attributable to the following factors:

Ÿ The recovery of the global economy and overall economic growth in our principal geographic markets led to an increased market demand for our advertising services.

Ÿ Our performance in 2009 and the first half of 2010 demonstrated our ability to deliver continuous growth in net revenues and improvement in results of operations. For example, our market share in terms of total user time spent viewing online videos in China increased from 36% in 2009 to 40% in the second quarter of 2010, according to iResearch. Our net revenues increased from RMB33.0 million in 2008 to RMB153.6 million in 2009.

Ÿ As we have established a more solid financial and operating history over time, the reliability of our forecasted results has improved, and therefore the perceived risk of investing in our company is generally considered lower than in the early stages of the development of our business. Therefore, the estimated WACC, which reflects the perceived risks of and market participants’ expected rate of return for investing in our securities, declined gradually from 27% on August 1, 2009 to 22% on February 1, 2010.

The fair value of our ordinary shares increased from US$0.1849 on February 1, 2010 to US$0.3855 on August 1, 2010. The increase was primarily attributable to the following factors:

Ÿ We commenced the preparation for this offering in the second quarter of 2010. The proximity of this offering increased the liquidity of our shares and hence lowered the DLOM from 25% on February 1, 2010 to 9% on August 1, 2010.

Ÿ Our financial and operating performance continued to improve in the first half of 2010. The number of our international and domestic brand advertisers increased from 163 in the six months ended June 30, 2009 to 259 in the six months ended June 30, 2010. Our net revenues increased from RMB51.8 million to RMB119.8 million during the same periods. These improvements further reduced the uncertainty associated with achieving our financial forecasts and the perceived risks of investing in our securities. In view of the above, our estimated WACC also declined from 22% on February 1, 2010 to 18% on August 1, 2010.

Ÿ As a result of the recovery of general economic conditions, many advertisers increased their advertising budgets in the second half of 2010, which had a positive impact on our business, results of operations and financial conditions.

Ÿ In general, the global financial market recovered during 2010 and market sentiment towards China-based publicly-traded companies improved, which resulted in an overall appreciation in the market value of their shares. For instance, the NASDAQ China Index generally increased in 2010 and closed at 164.83 on February 1, 2010 and 183.93 on August 1, 2010. The market capitalization of selected publicly traded companies in China’s Internet sector on average increased by 25% during such period.

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Our share-based compensation expense related to the options granted by us under the Plan amounted to RMB1.2 million in 2007, RMB3.7 million in 2008, RMB4.6 million in 2009 and RMB7.4 million (US$1.1 million) in the nine months ended September 30, 2010. The following table sets forth our share-based compensation charges as a part of our cost of revenues and operating expenses, based on the nature of the work the option holders were assigned to perform.

	Year Ended December 31,						Nine Months Ended September 30,
	2007		2008		2009		2009		2010
	RMB		RMB		RMB		RMB		RMB		US$
	(in thousands)
							(Unaudited)		(Unaudited)		(Unaudited)
Cost of revenues		—		259		283		206		550		82
Product development		684		1,401		1,657		1,206		2,038		305
Sales and marketing		141		861		1,690		1,161		3,645		545
General and administrative		424		1,144		935		675		1,142		170
Total		1,249		3,665		4,565		3,248		7,375		1,102

Determining the value of our share-based compensation expenses requires the input of highly subjective assumptions, including the expected life of the share-based awards, estimated forfeitures and the price volatility of the underlying shares. The assumptions used in calculating the fair value of share-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of our judgment. As a result, if factors change and we use different assumptions, our share-based compensation expenses could be materially different in the future.

Consolidation of Affiliated Entities

PRC law currently restricts foreign ownership of Internet content and advertising businesses. To comply with these foreign ownership restrictions, we operate our website and provide online advertising services in China through 1Verge Information and Jiaheyi, each a PRC company wholly owned by Ms. Qiong Qin, the wife of our founder and chief executive officer, and Mr. Dele Liu, our director, chief financial officer and senior vice president, both of whom are PRC citizens. 1Verge Information is our website operator and Internet content provider and holds the primary qualifications required to conduct our online video and advertising operations. Our wholly-owned subsidiary 1Verge Internet has contractual arrangements with 1Verge Information, Jiaheyi and their respective shareholders, pursuant to which 1Verge Internet extended loans to the shareholders of 1Verge Information and Jiaheyi, who in turn applied the funds from those loans as the paid-in capital of 1Verge Information and Jiaheyi. 1Verge Internet provides technology consulting services to 1Verge Information and Jiaheyi, and has licensed certain trademarks and domain names to 1Verge Information. Despite the lack of technical majority ownership, a parent-subsidiary relationship exists between us and 1Verge Information and Jiaheyi, whereby the shareholders of the consolidated affiliated entities effectively assigned all of their voting rights underlying their equity interest in the consolidated affiliated entities to us. In addition, through the contractual arrangements, we demonstrate our ability and intention to exercise the ability to absorb substantially all the profits and the expected losses of the consolidated affiliated entities. Based on all the aforementioned contractual arrangements, we consolidate the affiliated entities as required by Accounting Standards Codification subtopic 810-10.

Impairment of Long-Lived Assets

We review long-lived assets and certain identifiable intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparing their carrying amounts to the future undiscounted cash flows the assets are expected to generate. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, we recognize an impairment loss equal to the amount by which the carrying value of the asset exceeds its fair value.

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Accounts Receivable

We consider many factors in assessing the collectability of our receivables due from our customers, such as the age of the amounts due and customers’ payment history and credit-worthiness. We record an allowance for doubtful accounts in the period in which a loss is determined to be probable. Accounts receivable balances are written off after all collection efforts have been exhausted.

Income Taxes

We account for income taxes using the liability method. We determine deferred taxes based upon differences between the financial reporting and tax bases of assets and liabilities at currently enacted statutory tax rates for the years in which the differences are expected to reverse. We record a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that a portion, or all, of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date of such change.

Results of Operations

The following table sets forth a summary of our consolidated results of operations for the periods indicated. Our business has grown rapidly since we launched Youku.com in December 2006. Our limited operating history makes it difficult to predict future operating results. We believe that period-to-period comparisons of results of operations should not be relied upon as indicative of future performance.

	Year Ended December 31,									Nine Months Ended September 30,
	2007			2008			2009			2009			2010
	RMB			RMB			RMB			RMB			RMB			US$
	(in thousands)
										(Unaudited)			(Unaudited)			(Unaudited)
Net revenues(1)		1,778			33,022			153,626			99,784			234,623			35,068
Cost of revenues		(46,148	)		(171,130	)		(216,708	)		(157,684	)		(248,719	)		(37,175	)
Gross loss		(44,370	)		(138,108	)		(63,082	)		(57,900	)		(14,096	)		(2,107	)
Operating expenses:
Sales and marketing		(22,469	)		(35,086	)		(72,746	)		(46,485	)		(91,527	)		(13,680	)
Product development		(15,530	)		(15,398	)		(20,908	)		(15,003	)		(21,260	)		(3,178	)
General and administrative		(5,843	)		(14,367	)		(18,523	)		(13,043	)		(18,716	)		(2,797	)
Total operating expenses		(43,842	)		(64,851	)		(112,177	)		(74,531	)		(131,503	)		(19,655	)
Loss from operations		(88,212	)		(202,959	)		(175,259	)		(132,431	)		(145,599	)		(21,762	)
Interest income		1,013			5,384			2,054			1,840			1,068			160
Interest expense		—			(4,240	)		(6,835	)		(5,401	)		(4,963	)		(742	)
Amortization of debt issuance costs		—			(2,380	)		—			—			—			—
Change in fair value of derivative financial liabilities and warrant liability		(2,422	)		(264	)		(2,313	)		(357	)		(17,532	)		(2,620	)
Others, net		(62	)		(1	)		67			48			65			10
Loss from operations before income taxes		(89,683	)		(204,460	)		(182,286	)		(136,301	)		(166,961	)		(24,954	)
Income taxes		—			—			—			—			—			—
Net loss		(89,683	)		(204,460	)		(182,286	)		(136,301	)		(166,961	)		(24,954	)

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(1) Net revenues are presented net of commissions earned by third-party advertising agencies, as the term is defined on page 7, as set forth below:

	Year Ended December 31,						Nine Months Ended September 30,
	2007		2008		2009		2009		2010
	RMB		RMB		RMB		RMB		RMB		US$
	(in thousands)
							(Unaudited)		(Unaudited)		(Unaudited)
Commissions earned by third-party advertising agencies		—		6,379		37,866		22,761		53,888		8,054

Comparison of the Nine Months Ended September 30, 2010 and 2009

Net Revenues.    Our total net revenues increased significantly from RMB99.8 million in the nine months ended September 30, 2009 to RMB234.6 million (US$35.1 million) in the nine months ended September 30, 2010. This increase was primarily due to a substantial increase in our revenues from brand advertising sales, and, to a lesser extent, due to increases in our revenues from affiliate advertising programs and other sources, such as wireless subscription services and sub-licensing of licensed content to other video websites.

Our brand advertising revenues increased significantly from RMB91.6 million in the nine months ended September 30, 2009 to RMB222.7 million (US$33.3 million) in the nine months ended September 30, 2010. This increase was mainly attributable to increased use by brand advertisers of our advertising services to promote their brands and market their products and services, as evidenced by an increase in the number of advertisers from 230 in the nine months ended September 30, 2009 to 343 in the nine months ended September 30, 2010 and an increase in the average net revenues per advertiser from RMB398,107 to RMB649,245 (US$97,040) during these periods. The increase in net revenues also reflected the increase in our average list price. Our net revenues derived from affiliated advertising programs increased by 16.4% from RMB6.7 million in the nine months ended September 30, 2009 to RMB7.8 million (US$1.2 million) in the nine months ended September 30, 2010. This increase was primarily attributable to increases in user traffic on our website and number of visitors’ clicks on the advertisements placed on our website. Our net revenues derived from other sources increased significantly from RMB1.5 million in the nine months ended September 30, 2009 to RMB4.2 million (US$0.6 million) in the nine months ended September 30, 2010. This increase was primarily attributable to the sub-licensing fees we received from sub-licensing of licensed content to other video websites and our wireless subscription services.

Cost of Revenues.    Our cost of revenues increased by 57.7% from RMB157.7 million in the nine months ended September 30, 2009 to RMB248.7 million (US$37.2 million) in the nine months ended September 30, 2010. The increase in our cost of revenues was due to increases in bandwidth costs, depreciation of servers and other equipment, content costs and business tax and surcharges.

Ÿ Bandwidth Costs.    Our bandwidth costs increased by 25.8% from RMB111.3 million in the nine months ended September 30, 2009 to RMB140.0 million (US$20.9 million) in the nine months ended September 30, 2010, resulting from increased bandwidth needs to support the growth of our user traffic. The number of our monthly unique visitors from homes and offices increased from approximately 144 million in September 2009 to approximately 203 million in September 2010, and the number of our monthly unique visitors from Internet cafes increased from approximately 51 million in September 2009 to approximately 61 million in August 2010. The increase in bandwidth costs was partially offset by an approximately 9% decrease of average bandwidth unit cost during this period.

Ÿ Depreciation of Servers and Other Equipment.    Depreciation of our servers and other equipment increased by 18.4% from RMB24.5 million in the nine months ended September 30, 2009 to RMB29.0 million (US$4.3 million) in the nine months ended September 30, 2010, as we acquired more servers and other equipment to accommodate increased user traffic.

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Ÿ Content Costs.    Our content costs increased significantly from RMB11.3 million in the nine months ended September 30, 2009 to RMB56.5 million (US$8.4 million) in the nine months ended September 30, 2010. This was primarily due to a substantial increase in unit acquisition cost of professionally produced content, such as licensing fees for television serial dramas and movies, since the second half of 2009. According to our internal records, the average license fee for television serial drama has increased in 2010 to date by more than 100% as compared to 2009, and the average license fee for movies has also increased in 2010 to date by more than 90% as compared to 2009. The increase in content costs was also attributable to the rapid expansion of our library collection by, among other things, licensing more popular and in-season professionally produced content. For example, we licensed from China Network Television all of the soccer games of the 2010 FIFA World Cup-related content in the first half of 2010.

Ÿ Business Tax and Surcharges.    The business tax and surcharges we incurred increased significantly from RMB10.6 million in the nine months ended September 30, 2009 to RMB23.2 million (US$3.5 million) in the nine months ended September 30, 2010, in line with the growth in our revenues before deduction of commissions earned by third-party advertising agencies.

Operating Expenses.    Our operating expenses increased by 76.5% from RMB74.5 million in the nine months ended September 30, 2009 to RMB131.5 million (US$19.7 million) in the nine months ended September 30, 2010, primarily due to increases in sales and marketing expenses and product development expenses, which reflected the general growth of our business.

Ÿ Sales and Marketing Expenses.    Our sales and marketing expenses increased by 96.8% from RMB46.5 million in the nine months ended September 30, 2009 to RMB91.5 million (US$13.7 million) in the nine months ended September 30, 2010. This increase was primarily due to higher salaries, benefits and commissions for our sales and marketing personnel, primarily resulting from increased commission expenses to our sales force in line with our revenue growth and increased headcount and, to a lesser extent, due to an increase in our marketing and promotional expenses and our brand building efforts.

Ÿ Product Development Expenses.    Our product development expenses increased by 42.0% from RMB15.0 million in the nine months ended September 30, 2009 to RMB21.3 million (US$3.2 million) in the nine months ended September 30, 2010, primarily due to an increase in salaries and benefits for product development personnel primarily resulting from the headcount increase.

Ÿ General and Administrative Expenses.    Our general and administrative expenses increased by 43.8% from RMB13.0 million in the nine months ended September 30, 2009 to RMB18.7 million (US$2.8 million) in the nine months ended September 30, 2010, primarily due to an increase in salaries and benefits for our general and administrative personnel primarily resulting from headcount increase.

Interest Income.    Our interest income decreased from RMB1.8 million in the nine months ended September 30, 2009 to RMB1.1 million (US$0.2 million) in the nine months ended September 30, 2010 primarily due to a decrease in average balance of our bank deposits.

Interest Expense.    Our interest expense decreased from RMB5.4 million in the nine months ended September 30, 2009 to RMB5.0 million (US$0.7 million) in the nine months ended September 30, 2010, primarily due to the repayment of our long term debt obligation under an equipment loan and security agreement and a supplemental agreement, or the Loan Agreements, which we entered into with third-party lenders on April 23, 2008.

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Change in Fair Value of Derivative Financial Liabilities and Warrant Liability.    Our losses incurred in change of fair value of derivative financial liabilities and warrant liability increased from RMB0.4 million in the nine months ended September 30, 2009 to RMB17.5 million (US$2.6 million) in the nine months ended September 30, 2010 due to the change in fair market value of the warrants issued for each draw-down of the loan under the Loan Agreements.

Taxation.    Since we had an operating loss before tax in the nine months ended September 30,2009 and the nine months ended September 30, 2010, we had nil income taxes in these periods.

Net Loss.    As a result of the foregoing, our net loss increased from RMB136.3 million in the nine months ended September 30, 2009 to RMB167.0 million (US$25.0 million) in the nine months ended September 30, 2010.

Comparison of the Years Ended December 31, 2009 and 2008

Net Revenues.    Our total net revenues increased significantly from RMB33.0 million in 2008 to RMB153.6 million in 2009. This increase was primarily due to a substantial increase in our revenues from brand advertising sales, and, to a lesser extent, due to an increase in our revenues from affiliate advertising programs. Our brand advertising revenues increased significantly from RMB29.4 million in 2008 to RMB140.7 million in 2009, mainly attributable to increased use by brand advertisers of our advertising services to promote their brands and market their products and services, as evidenced by an increase in the number of advertisers from 141 in 2008 to 303 in 2009 and an increase in the average net revenues per advertiser from RMB208,340 to RMB464,409. The increase in net revenues also reflected the increase in our average list price. Our net revenues derived from affiliated advertising programs increased significantly from RMB3.6 million in 2008 to RMB9.7 million in 2009, primarily attributable to increases in user traffic on our website and the number of visitors’ clicks on the advertisements placed on our website.

Cost of Revenues.    Our cost of revenues increased by 26.7% from RMB171.1 million in 2008 to RMB216.7 million in 2009. The increase in our cost of revenues was due to increases in bandwidth costs, depreciation of servers and other equipment, content costs and business tax and surcharges.

Ÿ Bandwidth Costs.    Our bandwidth costs increased by 13.3% from RMB131.9 million in 2008 to RMB149.5 million in 2009, resulting from increased bandwidth needs to support the growth of our user traffic. The number of our monthly unique visitors from homes and offices increased from approximately 82 million in December 2008 to approximately 154 million in December 2009, and the number of our monthly unique visitors from Internet cafes increased from approximately 36 million in December 2008 to approximately 59 million in December 2009. The increase in bandwidth costs was partially offset by a decrease of average bandwidth unit cost of approximately 4% during this period and our efforts to enhance the efficiency of the bandwidth usage during the 2009 economic recession.

Ÿ Depreciation of Servers and Other Equipment.    Depreciation of our servers and other equipment increased by 32.7% from RMB25.4 million in 2008 to RMB33.7 million in 2009, as we acquired more servers and other equipment to accommodate increased user traffic.

Ÿ Content Costs.    Our content costs increased by 64.1% from RMB10.3 million in 2008 to RMB16.9 million in 2009, primarily because we licensed and produced more content to expand our library collection and enhance user experience. This increase was also attributable to an increase in unit acquisition cost of professionally produced content, such as licensing fees for television serial dramas and movies since the second half of 2009. According to our internal records, the average license fee for television serial drama has increased in 2009 by more than 200% as compared to 2008.

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Ÿ Business Tax and Surcharges.    The business tax and surcharges we incurred increased significantly from RMB3.5 million in 2008 to RMB16.6 million in 2009, in line with the growth in our revenues before deduction of commissions earned by third-party advertising agencies.

Operating Expenses.    Our operating expenses increased by 72.9% from RMB64.9 million in 2008 to RMB112.2 million in 2009, primarily due to increases in sales and marketing expenses and product development expenses, which reflected the general growth of our business.

Ÿ Sales and Marketing Expenses.    Our sales and marketing expenses increased by 107.1% from RMB35.1 million in 2008 to RMB72.7 million in 2009. This increase was primarily due to higher salaries, benefits and commissions for our sales and marketing personnel, primarily resulting from increased headcount and, to a lesser extent, due to an increase in our marketing and promotional expenses and our enhanced brand building efforts.

Ÿ Product Development Expenses.    Our product development expenses increased by 35.7% from RMB15.4 million in 2008 to RMB20.9 million in 2009, primarily due to an increase in salaries and benefits for product development personnel primarily resulting from the increased headcount.

Ÿ General and Administrative Expenses.    Our general and administrative expenses increased by 28.5% from RMB14.4 million in 2008 to RMB18.5 million in 2009, primarily due to an increase in salaries and benefits for our general and administrative personnel primarily resulting from headcount increase.

Interest Income.    Our interest income decreased from RMB5.4 million in 2008 to RMB2.1 million in 2009 primarily due to a decrease in average balance of bank deposits and, to a lesser extent, due to a decrease of interest rate from 2008 to 2009.

Interest Expense.    Our interest expense increased from RMB4.2 million in 2008 to RMB6.8 million in 2009, primarily due to an increase in interest on borrowings under the Loan Agreements.

Change in Fair Value of Derivative Financial Liabilities and Warrant Liability.    Our losses incurred in change of fair value of derivative financial liabilities and warrant liability increased from RMB0.3 million in 2008 to RMB2.3 million in 2009 due to the change in fair market value of the warrants issued for each draw-down of the loan under the Loan Agreements.

Taxation.    Since we had an operating loss before tax in 2008 and 2009, we had nil income taxes in these years.

Net Loss.    As a result of the foregoing, our net loss decreased from RMB204.5 million in 2008 to RMB182.3 million in 2009.

Comparison of the Years Ended December 31, 2008 and 2007

Net Revenues.    Our total net revenues increased significantly from RMB1.8 million in 2007 to RMB33.0 million in 2008. This increase was primarily due to a substantial increase in our net revenues from our brand advertising sales, and, to a lesser extent, due to an increase in our net revenues from affiliate advertising programs. Our brand advertising revenues increased significantly from RMB1.2 million in 2007 to RMB29.4 million in 2008, mainly attributable to increased use by brand advertisers of our advertising services to promote their brands and market their products and services, as evidenced by an increase in the number of advertisers from 7 to 141 and an increase in the average net revenues per advertiser from RMB165,714 to RMB208,340. Our net revenues derived from affiliate advertising programs increased significantly from RMB0.6 million in 2007 to RMB3.6 million in 2008, primarily attributable to increases user traffic on our website and the number of visitors’ clicks on the advertisements placed on our website.

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Cost of Revenues.    Our cost of revenues increased significant from RMB46.1 million in 2007 to RMB171.1 million in 2008. This increase was primarily due to our substantial investments on bandwidth, servers and other equipment and our content library at the early stage of our operations.

Ÿ Bandwidth Costs.    Our bandwidth costs increased significantly from RMB35.7 million in 2007 to RMB131.9 million in 2008, resulting from increased needs to support the rapid growth of our user traffic and the expansion of our market share at the early stage of our business. The number of our monthly unique visitors from homes and offices increased from approximately 50 million in December 2007 to approximately 82 million in December 2008. The increase in bandwidth costs was partially offset by an approximately 3% decrease of average bandwidth unit cost during this period.

Ÿ Depreciation of Servers and Other Equipment.    Depreciation of our servers and other equipment increased significantly from RMB7.2 million in 2007 to RMB25.4 million in 2008, as we acquired servers and other equipment to accommodate increased user traffic.

Ÿ Content Costs.    Our content costs increased significantly from RMB3.1 million in 2007 to RMB10.3 million in 2008, primarily because we licensed more content in an effort to build a large and comprehensive video content library.

Ÿ Business Tax and Surcharges.    The business tax and surcharges we incurred increased significantly from RMB0.2 million in 2007 to RMB3.5 million in 2008, in line with the growth in our revenues before deduction of commissions earned by third-party advertising agencies.

Operating Expenses.    Our operating expenses increased by 48.2% from RMB43.8 million in 2007 to RMB64.9 million in 2008, primarily due to increases in sales and marketing expenses and general and administrative expenses, which reflected the general growth of our business.

Ÿ Sales and Marketing Expenses.    Our sales and marketing expenses increased by 56.0% from RMB22.5 million in 2007 to RMB35.1 million in 2008. This increase was due in large part to higher salaries, benefits and commissions for our sales and marketing personnel primarily resulting from increased headcount, partially offset by a decrease in marketing and promotional expenses as we stopped advertising through other Internet companies in 2008.

Ÿ Product Development Expenses.    Our product development expenses decreased by 0.6% from RMB15.5 million in 2007 to RMB15.4 million in 2008, primarily due to the fact that we booked our bandwidth, equipment depreciation and content expenses as product development expenses during the period from January 2007 to April 2007 as we did not record any revenues during this period.

Ÿ General and Administrative Expenses.    Our general and administrative expenses increased by 148.3% from RMB5.8 million in 2007 to RMB14.4 million in 2008, primarily due to an increase in professional service fees and an increase in salaries and benefits for our general and administrative personnel primarily resulting from increased headcount.

Interest Income.    Our interest income increased significantly from RMB1.0 million in 2007 to RMB5.4 million in 2008 primarily due to an increase in average balance of bank deposits in 2008.

Interest Expense.    We incurred interest expense of RMB4.2 million in 2008, due to the interest under an equipment loan and security agreement entered into by us and third-party lenders on April 23, 2008. We had nil similar costs in 2007.

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Amortization of Debt Issuance Costs.    We incurred a one-off amortization of debt issuance costs of RMB2.4 million in 2008, due to the costs we incurred in connection with the issuance of long-term debt under the Loan Agreements, primarily reflecting the fair value of warrants issued to the third-party lenders as considerations for entering into the Loan Agreements.

Change in Fair Value of Derivative Financial Liabilities and Warrant Liability.    Our losses incurred in change of fair value of derivative financial liabilities of RMB2.4 million in 2007 decreased to a loss of RMB0.3 million due to change in fair market value of the contingent purchase right issued to the investors of Series B convertible redeemable preferred shares.

Taxation.    Since we had a net loss before tax in 2007 and 2008, we had nil income taxes in these years.

Net Loss.    As a result of the foregoing, we recorded an operating loss of RMB204.5 million in 2008, as compared to RMB89.7 million in 2007.

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Selected Quarterly Results of Operations

The following table sets forth our unaudited condensed consolidated quarterly results of operations for each of the nine quarters in the period from July 1, 2008 to September 30, 2010. You should read the following table in conjunction with our consolidated financial statements and the related notes included elsewhere in this prospectus. We have prepared the unaudited condensed consolidated quarterly financial information on the same basis as our audited consolidated financial statements. The unaudited condensed consolidated financial information includes all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of our financial position and operating results for the quarters presented.

	Three Months Ended
	September 30, 2008			December 31, 2008			March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009			March 31, 2010			June 30, 2010			September 30, 2010
	RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB
	(in thousands)
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net revenues		11,919			13,394			18,148			33,672			47,964			53,842			48,613			71,203			114,807
Cost of revenues		(50,521	)		(53,400	)		(50,129	)		(52,597	)		(54,958	)		(59,024	)		(66,927	)		(82,738	)		(99,054	)
Gross profit (loss)		(38,602	)		(40,006	)		(31,981	)		(18,925	)		(6,994	)		(5,182	)		(18,314	)		(11,535	)		15,753
Operating expenses
Product development		(4,135	)		(4,399	)		(4,508	)		(4,925	)		(5,570	)		(5,905	)		(5,734	)		(6,702	)		(8,824	)
Sales and marketing		(8,724	)		(12,045	)		(11,247	)		(15,415	)		(19,823	)		(26,261	)		(20,202	)		(32,786	)		(38,539	)
General and administrative		(3,829	)		(4,350	)		(2,928	)		(4,340	)		(5,775	)		(5,480	)		(5,096	)		(6,378	)		(7,242	)
Total operating expenses		(16,688	)		(20,794	)		(18,683	)		(24,680	)		(31,168	)		(37,646	)		(31,032	)		(45,866	)		(54,605	)
Loss from operations		(55,290	)		(60,800	)		(50,664	)		(43,605	)		(38,162	)		(42,828	)		(49,346	)		(57,401	)		(38,852	)
Interest income		1,872			1,872			693			685			462			214			219			584			265
Interest expenses		(1,519	)		(1,898	)		(1,960	)		(1,813	)		(1,628	)		(1,434	)		(1,403	)		(1,043	)		(2,517	)
Amortization of debt issuance costs		(869	)		(869	)		—			—			—			—			—			—			—
Change in fair value of derivative financial liabilities and warrant liability		44			397			(240	)		(50	)		(67	)		(1,956	)		(748	)		(4,808	)		(11,976	)
Others, net		1			(68	)		(25	)		69			4			19			77			30			(42	)
Loss before income taxes		(55,761	)		(61,366	)		(52,196	)		(44,714	)		(39,391	)		(45,985	)		(51,201	)		(62,638	)		(53,122	)
Income taxes		—			—			—			—			—			—			—			—			—
Net loss		(55,761	)		(61,366	)		(52,196	)		(44,714	)		(39,391	)		(45,985	)		(51,201	)		(62,638	)		(53,122	)

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The growth of our quarterly net revenues was primarily driven by the continual increases in net revenues derived from brand advertising sales in the nine quarters in the period from July 1, 2008 to September 30, 2010. Such increases were mainly attributable to increased use by brand advertisers of our advertising services to promote their brands and market their products and services, as evidenced by an increase in the number of advertisers and an increase in the average net revenues per advertiser during these periods. The increases in net revenues also reflected the increases in our average list price. Our net revenues have generally increased at a higher rate than our cost of revenues and operating expenses during these periods, as we have been able to achieve greater economies of scale and grow our net revenues through enhanced marketing and promotional activities. We recorded gross profit for the first time in the third quarter of 2010.

Seasonal fluctuations and industry cyclicality have affected, and are likely to continue to affect, our business. We generally generate less revenues from brand advertising sales during national holidays in China, in particular during the Chinese New Year holidays in the first quarter of each year. In addition, advertising spending in China has historically been cyclical, reflecting overall economic conditions as well as the budgeting and buying patterns of our advertisers. Our rapid growth has lessened the impact of the seasonal fluctuations and cyclicality. However, we expect that the seasonal fluctuations and cyclicality to cause our quarterly and annual operating results to fluctuate. See “Risk Factors—Risks Related to Our Business and Industry—Our quarterly revenues and operating results may fluctuate, which make our results of operations difficult to predict and may cause our quarterly results of operations to fall short of expectations.”

Additional Non-GAAP Financial Measure—Adjusted EBITDA

To supplement our consolidated financial statements which are presented in accordance with U.S. GAAP and in addition to the previously mentioned non-GAAP financial measures of adjusted revenues and adjusted net loss, we also use Adjusted EBITDA as an additional non-GAAP financial measure. Our Adjusted EBITDA represents net income or loss before income taxes, interest expenses, interest income, depreciation and amortization, further adjusted for change in fair value of derivative financial liabilities and warrant liability, share-based compensation expense and other non-operating items. We present Adjusted EBITDA because it is used by our management to evaluate our operating performance. We also believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our consolidated results of operations in the same manner as our management and in comparing financial results across accounting periods and to those of our peer companies.

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The following tables reconciles our Adjusted EBITDA in 2007, 2008, 2009 and the nine months ended September 30, 2009 and 2010, as well as the nine quarters in the period from July 1, 2008 to September 30, 2010 to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, which is net loss:

	Year Ended December 31,									Nine Months Ended September 30,
	2007			2008			2009			2009			2010
	RMB			RMB			RMB			RMB			RMB			US$
	(in thousands)
Net loss		(89,683	)		(204,460	)		(182,286	)		(136,301	)		(166,961	)		(24,954	)
Add (deduct):
Income taxes		—			—			—			—			—			—
Interest expense		—			4,240			6,835			5,401			4,963			742
Interest income		(1,013	)		(5,384	)		(2,054	)		(1,840	)		(1,068	)		(160	)
Depreciation		8,726			26,923			36,207			26,335			32,283			4,825
Amortization of intangible assets		—			1,450			4,581			2,383			31,935			4,773
Share-based compensation		1,249			3,665			4,565			3,248			7,375			1,102
Amortization of debt issuance costs		—			2,380			—			—			—			—
Change in fair value of derivative financial liabilities and warrant liability		2,422			264			2,313			357			17,532			2,620
Others, net		62			1			(67	)		(48	)		(65	)		(10	)
Adjusted EBITDA		(78,237	)		(170,921	)		(129,906	)		(100,465	)		(74,006	)		(11,062	)

	Three Months Ended
	September 30, 2008			December 31, 2008			March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009			March 31, 2010			June 30, 2010			September 30, 2010
	RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB
	(in thousands)
Net loss		(55,761	)		(61,366	)		(52,196	)		(44,714	)		(39,391	)		(45,985	)		(51,201	)		(62,638	)		(53,122	)
Add (deduct):
Income taxes		—			—			—			—			—			—			—			—			—
Interest expense		1,519			1,898			1,960			1,813			1,628			1,434			1,403			1,043			2,517
Interest income		(1,872	)		(1,872	)		(693	)		(685	)		(462	)		(214	)		(219	)		(584	)		(265	)
Depreciation		7,545			7,900			8,271			8,746			9,318			9,872			10,508			11,034			10,741
Amortization of intangible assets		360			725			644			686			1,053			2,198			3,571			10,229			18,135
Share-based compensation		1,044			961			994			1,029			1,225			1,317			1,864			2,095			3,416
Amortization of debt issuance costs		869			869			—			—			—			—			—			—			—
Change in fair value of derivative financial liabilities and warrant liability		(44	)		(397	)		240			50			67			1,956			748			4,808			11,976
Others, net		(1	)		68			25			(69	)		(4	)		(19	)		(77	)		(30	)		42
Adjusted EBITDA		(46,341	)		(51,214	)		(40,755	)		(33,144	)		(26,566	)		(29,441	)		(33,403	)		(34,043	)		(6,560	)

The use of Adjusted EBITDA has certain limitations because its does not reflect all items of income and expense that affect our operations. Items excluded from Adjusted EBITDA are significant components in understanding and assessing our operating and financial performance. Depreciation expense, amortization, income taxes, interest expenses and interest income as well as change in fair value of derivative financial liabilities and warrant liability, share-based compensation expenses and other non-operating items have been and may continue to be incurred in our business and are not reflected in the presentation of Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, Adjusted EBITDA does not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by reconciling this non-GAAP financial measure to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. The term Adjusted EBITDA is not defined under U.S. GAAP, and Adjusted EBITDA is not a measure of net income, operating income, operating performance or liquidity presented in accordance with

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U.S. GAAP. When assessing our operating and financial performance, you should not consider such data in isolation or as a substitute for our net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. Further, Adjusted EBITDA may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

Liquidity and Capital Resources

Cash Flows and Working Capital

To date, we have financed our operations primarily through private placements of preferred shares to investors. As of September 30, 2010, we had RMB440.6 million (US$65.8 million) in cash and cash equivalents. On April 23, 2008, we entered into an equipment loan and security agreement and a supplemental agreement with independent third parties. Under these agreements, the lenders agreed to make term loans to us in an aggregate principal amount of up to US$10 million from time to time from April 23, 2008 to the earlier of the date the lenders may terminate these agreements in the event of default and December 31, 2008. We may only use the loan to purchase certain equipment. As of September 30, 2010, we had RMB47.3 million (US$7.1 million) outstanding debt under these agreements. The principal amount of the loans made under these agreements is to be repaid over a period of 36 months, and the interest is charged at a fixed rate of 12% per annum. We have pledged our equity interest in 1Verge Internet to the lenders for our obligations and liabilities under these agreements. On July 13, 2010, we entered into a working capital loan agreement with third-party lenders for a commitment of up to US$10 million. The principal for the borrowings made under this agreement is to be repaid over a period of 36 months and the interest is charged at a fixed rate of 12% per annum. We borrowed US$5 million under this agreement on July 14, 2010. The termination date of the remaining US$5 million commitment under this agreement is October 31, 2010. In addition, on September 20, 2010, we closed a private placement of our Series F preferred shares to a group of investors for US$50 million, which demonstrated our ability to obtain additional financing. We believe that our cash, the anticipated cash flow from operations, the net proceeds we expect to receive from this offering and the borrowings from our loan agreements will be sufficient to meet our anticipated cash needs for the next two to three years, after which period we expect to generate positive cash flow from operations. If we have additional liquidity needs in the future, we may obtain additional financing, including equity offering and debt financing in capital markets, to meet such needs.

Although we consolidate the results of 1Verge Information and Jiaheyi, our access to cash balances or future earnings of 1Verge Information and Jiaheyi is only through our contractual arrangements with them. See “Corporate Structure.” For restrictions and limitations on liquidity and capital resources as a result of our corporate structure, see “—Holding Company Structure.”

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The following table sets forth a summary of our cash flows for the periods indicated:

	Year Ended December 31,									Nine Months Ended September 30,
	2007			2008			2009			2009			2010
	RMB			RMB			RMB			RMB			RMB			US$
	(in thousands)
										(Unaudited)			(Unaudited)			(Unaudited)
Net cash used in operating activities		(79,902	)		(170,603	)		(135,818	)		(98,536	)		(116,647	)		(17,434	)
Net cash (used in) provided by investing activities		(42,880	)		(153,085	)		88,367			70,660			(92,807	)		(13,872	)
Net cash provided by (used in) financing activities		241,348			255,890			260,191			(7,238	)		348,670			52,114
Effect of foreign exchange rate changes on cash and cash equivalents		(1,741	)		(1,042	)		(47	)		(17	)		(270	)		(40	)
Net increase (decrease) in cash and cash equivalents		116,825			(68,840	)		212,693			(35,131	)		138,946			20,768
Cash and cash equivalents at the beginning of the year		40,930			157,755			88,915			88,915			301,608			45,080
Cash and cash equivalents at the end of the year		157,755			88,915			301,608			53,784			440,554			65,848

Operating Activities

Net cash used in operating activities consisted primarily of our net loss mitigated by non-cash adjustments, such as depreciation of servers and other equipment, and adjusted by changes in assets and liabilities, such as accounts receivable and accrued expenses and other liabilities. The fluctuations of net cash used in operating activities largely correspond to the changes in net loss. The increases in our accounts receivable were primarily due to the growth of our business.

Net cash used in operating activities amounted to RMB116.6 million (US$17.4 million) in the nine months ended September 30, 2010, primarily attributable to net loss of RMB167.0 million (US$25.0 million) and an increase of RMB95.6 million (US$14.3 million) in accounts receivable, partially offset by an increase of RMB60.1 million (US$9.0 million) in accrued expenses and other liabilities, an add-back of certain non-cash expenses such as depreciation of RMB32.3 million (US$4.8 million), amortization of intangible assets of RMB31.9 million (US$4.8 million), and change in fair value of derivative financial liabilities and warrant liability of RMB17.5 million (US$2.6 million).

Net cash used in operating activities amounted to RMB135.8 million in 2009, primarily attributable to net loss of RMB182.3 million and an increase of RMB54.1 million in accounts receivable, partially offset by an increase of RMB58.1 million in accrued expenses and other liabilities and an add-back of certain non-cash expenses such as depreciation of RMB36.2 million.

Net cash used in operating activities amounted to RMB170.6 million in 2008, primarily attributable to net loss of RMB204.5 million and an increase of RMB21.1 million in accounts receivable, partially offset by an add-back of certain non-cash expenses such as depreciation of RMB26.9 million and an increase of RMB20.9 million in accrued expenses and other liabilities.

Net cash used in operating activities amounted to RMB79.9 million in 2007, primarily attributable to net loss of RMB89.7 million and a decrease of RMB8.9 million in accounts payable, partially offset by an add-back of certain non-cash expenses such as depreciation of RMB8.7 million and an increase of RMB10.5 million in accrued expenses and other liabilities.

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Investing Activities

Net cash used in or provided by investing activities largely reflects our capital expenditures, which consist of purchases of property and equipment in connection with the expansion and upgrade of our technology infrastructure, as well as short-term investments we made.

Net cash used in investing activities amounted to RMB92.8 million (US$13.9 million) in the nine months ended September 30, 2010, primarily attributable to acquisition of intangible assets in the amount of RMB62.5 million (US$9.3 million), purchases of property and equipment in the amount of RMB28.6 million (US$4.3 million).

Net cash provided by investing activities amounted to RMB88.4 million in 2009, primarily attributable to the proceeds from short-term deposits we made in 2008 in the aggregate amount of RMB114.0 million, partially offset by purchases of property and equipment in the amount of RMB25.6 million.

Net cash used in investing activities amounted to RMB153.1 million in 2008, primarily attributable to investments in short-term deposits totaling RMB114.0 million, purchases of property and equipment in the amount of RMB49.1 million and maturity of short-term deposits totaling RMB10.0 million.

Net cash used in investing activities amounted to RMB42.9 million in 2007, primarily attributable to purchases of property and equipment in the amount of RMB32.9 million and investment in short-term deposits totaling RMB10.0 million.

Financing Activities

Net cash used in financing activities amounted to RMB348.7 million (US$52.1 million) in the nine months ended September 30, 2010, primarily attributable to proceeds from our issuance of Series F preferred shares in the amount of 335.0 million (US$50.1 million) and drawdown of long-term debt in the amount of 33.9 million (US$5.1 million), partially offset by principal repayment of long-term debt in the amount of RMB19.0 million (US$2.8 million).

Net cash provided by financing activities amounted to RMB260.2 million in 2009, primarily attributable to the RMB273.4 million proceeds from the issuance of our Series E convertible redeemable preferred shares, partially offset by a RMB21.5 million principal repayments for our long-term debt obligation.

Net cash provided by financing activities amounted to RMB255.9 million in 2008, primarily attributable to the RMB206.0 million proceeds from the issuance of our Series D convertible redeemable preferred shares and drawdown of long-term debt in the amount of RMB59.0 million.

Net cash provided by financing activities amounted to RMB241.3 million in 2007, primarily attributable to the RMB185.1 million and RMB57.3 million proceeds from the issuances of our Series C and Series B convertible redeemable preferred shares, respectively.

Capital Expenditures

We made capital expenditures of RMB32.9 million, RMB49.1 million and RMB25.6 million in 2007, 2008 and 2009, respectively. In the past, our capital expenditures were primarily used to purchase servers and other equipment for our business. Our capital expenditures for 2010 are estimated to be approximately RMB60 million (US$9.0 million), of which we had spent approximately RMB34.7 million (US$5.2 million) as of September 30, 2010. Our primary planned capital expenditures for the rest of 2010 are purchase of servers and other equipment. Our capital expenditures may

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increase in the near term as our business continues to grow and as we expand and improve our CDN infrastructure. We also expect to incur additional costs in connection with our becoming a public company, including costs to prepare for our first Section 404 compliance testing and additional compliance costs associated with being a public company. We are not able to estimate with reasonable certainty these additional expenses but expect the additional costs not to exceed US$2 million in each of the next two years.

Contractual Obligations

The following table sets forth our contractual obligations as of December 31, 2009:

	Payment Due by Period
	Total				Less than 1 year		1-3 years		3-5 years		More than 5 years
	RMB		US$		RMB		RMB		RMB		RMB
	(in thousands)
Office rental		18,706		2,740		7,984		10,722		—		—
Bandwidth rental		120,866		17,707		103,098		17,768		—		—
Long-term debt		38,654		5,664		24,209		14,445		—		—
Total		178,226		26,111		135,291		42,935		—		—

Holding Company Structure

We are a holding company with no material operations of our own. We conduct our operations primarily through our wholly-owned subsidiaries and consolidated affiliated entities in China. As a result, our ability to pay dividends depends upon dividends paid by our PRC subsidiaries. If our PRC subsidiaries or any newly formed subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our PRC subsidiaries are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, each of our subsidiaries and consolidated affiliated entities in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, at its discretion, each of our subsidiaries and consolidated affiliated entities in China may allocate a portion of its after-tax profits based on PRC accounting standards to staff welfare and bonus funds. These reserve funds and staff welfare and bonus funds are not distributable as cash dividends. Our PRC subsidiaries have not paid our offshore entities any dividends nor have set aside any money to fund certain statutory reserve funds or staff welfare and bonus funds as they have not been profitable. Our PRC subsidiaries will not be able to pay dividends to our offshore entities until they generate accumulated profits and meet the requirements for statutory reserve funds. As of September 30, 2010, our PRC subsidiaries had accumulated deficits of approximately RMB109 million (US$16.3 million) in accordance with PRC accounting standards and regulations.

Off-Balance Sheet Commitments and Arrangements

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.

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Inflation

Since our inception, inflation in China has not materially impacted our results of operations. According to the National Bureau of Statistics of China, the change of consumer price index in China was 4.8%, 5.9% and (0.7)% in 2007, 2008 and 2009, respectively. Although we have not in the past been materially affected by inflation since our inception, we can provide no assurance that we will not be affected in the future by higher rates of inflation in China.

Quantitative and Qualitative Disclosure about Market Risk

Foreign Exchange Risk

Substantially all of our revenues and expenses are denominated in Renminbi. We do not believe that we currently have any significant direct foreign exchange risk and have not used any derivative financial instruments to hedge our exposure to such risk. Although in general, our exposure to foreign exchange risks should be limited, the value of your investment in our ADSs will be affected by the exchange rate between the U.S. dollar and the Renminbi because the value of our business is effectively denominated in Renminbi, while the ADSs will be traded in U.S. dollars.

The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in China’s political and economic conditions. The conversion of Renminbi into foreign currencies, including U.S. dollars, has been based on rates set by the People’s Bank of China. On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the Renminbi to the U.S. dollar. Under the revised policy, the Renminbi is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy resulted in a more than 20% appreciation of the Renminbi against the U.S. dollar in the following three years. Since July 2008, however, the Renminbi has traded within a narrow range against the U.S. dollar. As a consequence, the Renminbi has fluctuated significantly since July 2008 against other freely traded currencies, in tandem with the U.S. dollar. On June 20, 2010, the People’s Bank of China announced that the PRC government would further reform the Renminbi exchange rate regime and increase the flexibility of the exchange rate. It is difficult to predict how this new policy may impact the Renminbi exchange rate. To the extent that we need to convert U.S. dollars we receive from this offering into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we receive from the conversion. Conversely, if we decide to convert the Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amounts available to us.

We estimate that we will receive net proceeds of approximately US$             million from this offering, after deducting underwriting discounts and commissions and the estimated offering expenses payable by us, based on the initial offering price of US$             per ADS. Assuming that we convert the full amount of the net proceeds from this offering into RMB, a 10% appreciation of the Renminbi against the U.S. dollar, from a rate of RMB             to US$1.00 to a rate of RMB             to US$1.00, will result in a decrease of RMB             million (US$             million) of the net proceeds from this offering. Conversely, a 10% depreciation of the Renminbi against the U.S. dollar, from a rate of RMB             to US$1.00 to a rate of RMB             to US$1.00, will result in an increase of RMB             million (US$             million) of the net proceeds from this offering.

Interest Risk

Our exposure to interest rate risk primarily relates to the interest income generated by excess cash, which is mostly held in interest-bearing bank deposits. We have not used derivative financial

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instruments in our investment portfolio. Interest earning instruments carry a degree of interest rate risk. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in market interest rates. However, our future interest income may fall short of expectations due to changes in market interest rates.

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board, or the FASB, issued an Accounting Standard Update, which amends guidance regarding consolidation of variable interest entities to address the elimination of the concept of “qualified special purpose entity.” The Update replaces the basis for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying, among other things, the enterprise’s ability to direct the activities of the entity, and the obligation to absorb losses of the entity or the right to receive benefits from the entity. The Update requires any enterprise that holds a variable interest in a variable interest entity to provide enhanced disclosures that will provide users of financial statements with more transparent information about the enterprise’s involvement in the variable interest entity. The Update is effective for interim and annual reporting periods beginning after November 30, 2009. We are currently evaluating the impact, if any, of adopting this Update on our consolidated financial statements.

In June 2009, the FASB issued an Accounting Standard Codification 810, or ASC 810. ASC 810 eliminates FASB Interpretation 46(R)’s exceptions to consolidating qualifying special-purpose entities, contains new criteria for determining the primary beneficiary of a variable interest entity, and increases the frequency of required reassessments to determine whether a company is the primary beneficiary of a variable interest entity. ASC 810 is effective for annual reporting periods beginning after November 15, 2009. The adoption of ASC 810 did not have a material impact on our condensed consolidated financial statements.

In October 2009, the FASB issued an Accounting Standard Update on revenue recognition relating to multiple deliverable revenue arrangements. The Update addresses how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting, and how the arrangement considerations should be allocated among the separate units of accounting. This Update is effective for fiscal years beginning after June 15, 2010 and to be applied retrospectively or prospectively for new or materially modified arrangements. Early adoption is permitted. We are currently evaluating the impact, if any, of adopting this Update on our consolidated financial statements.

In December 2009, the FASB issued an Accounting Standard Update, which changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting or similar rights should be consolidated. This Update requires a reporting entity to provide additional disclosure about its involvement with variable interest entities and any significant changes in risk exposure due to that involvement. This Update is effective for fiscal years beginning after November 15, 2009. Early adoption is not permitted. We do not expect the adoption of this Update will have a significant effect on our consolidated financial statements.

In January 2010, the FASB issued an Accounting Standard Update improving disclosures about fair value measurements to require a number of additional disclosures regarding (i) the different classes of assets and liabilities measured at fair value, (ii) the valuation and input techniques used, (iii) the activity in Level 3 fair value measurements, and (iv) the transfers among Levels 1, 2 and 3. The requirements for new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about Level 3 activity of purchases, sales, issuances and settlements on a gross basis, which will be effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We do not expect the adoption of this Update will have a significant effect on our consolidated financial statements.

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In February 2010, the FASB issued an Accounting Standard Update eliminating inconsistencies and outdated provisions and provided the needed clarifications to various topics within Accounting Standard Codification topic 815. The amendments are effective for the first period beginning after February 2, 2010, except for certain amendments. The amendments to the guidance on accounting for income taxes in reorganizations should be applied to reorganizations for which the date of the reorganization is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. For the reorganizations reflected in interim financial statements issued before the effectiveness of the amendments in this Update, retrospective application is required. The clarifications of the guidance on the embedded derivatives and hedging are effective for fiscal years beginning after December 15, 2009, and should be applied to existing contracts containing embedded derivative features at the date of adoption. We are currently evaluating the impact, if any, of adopting this Update on our consolidated financial statements.

In February 2010, the FASB issued an Accounting Standard Update addressing both the interaction of the requirements of Accounting Standard Codification topic 855 with the SEC’s reporting requirements and the intended breadth of the reissuance disclosure provision related to subsequent events. All of the amendments in this Update are effective upon issuance, except for the use of the issued date for conduit debt obligors, which will be effective for annual or interim reporting periods after June 15, 2010. We do not expect the adoption of this Update will have a significant effect on our consolidated financial statements.

In April 2010, the FASB issued an Accounting Standard Update addressing the effect of denominating the exercise price of a share-based payment award in the currency of the market in which the underlying equity security trades. The amendments in this Update will be effective for fiscal years and interim reporting periods beginning on or after December 15, 2010. Early application is permitted. We do not expect the adoption of this Update will have a significant effect on our consolidated financial statements.

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INDUSTRY

This section contains certain market data and information prepared by third parties, some of which base their study of China’s advertising market on market data compiled by other sources. This market data and information may not necessarily be prepared and compiled on an a consistent basis.

Overview

The video media market encompasses the production, distribution and consumption of content from movies to television programs to short form, semi-professional and amateur videos. In the United States, this content is typically monetized through (i) advertising, as is the case with broadcast television; (ii) subscription fees, as is the case with cable television or movie subscription services such as Netflix; or (iii) pay-per-view fees, as is the case with theatrical releases of movies or access to televised live events such as concerts.

The video media market in China has developed in a very distinct manner from those in the United States and Western Europe. It is mainly due to the fact that nearly all forms of traditional media are either directly owned and operated, or controlled through strict regulations, by various levels of government. The resulting domestic ecosystem is highly fragmented both in terms of production and distribution.

The video media market in China is undergoing substantial changes. This is partially due to macro trends affecting the global video media market, such as the migration of consumers online, the digitization of both new and existing content, and more convenient access to that content through increasingly faster fixed and mobile broadband connections. The combined effect of these trends is that the Internet has emerged as a viable video distribution channel. In China, such changes are magnified by the country’s rapid economic growth, the expansion of the advertising industry, significantly increased consumer spending, and the fragmentation of the legacy production and distribution ecosystems for video content. This has created opportunities for web properties in China with differentiated, desirable video content to aggregate large, nationwide audiences while delivering personalized content whenever and wherever users want. With disposable income growing quickly in China, these aggregated audiences have become more attractive to advertisers as well as more capable of paying for content.

China’s Internet television market is early in its development and is evolving rapidly as an increasing number of users search, view and share video content online. For the purposes of this prospectus, Internet television is generally synonymous with online video and refers to consumers’ accessing any type of video content via any Internet-enabled device. The strong consumer reaction to, and the emerging advertiser reception of, Internet television in China represents an increasing convergence of the large and fast-growing Internet market and the large, diverse and highly fragmented video media market.

Internet Market in China

China is the world’s largest Internet market in terms of the number of both overall and broadband users. As of June 30, 2010, China had 420 million Internet users, of which 87% were broadband users, according to China’s Internet Network Information Center, or CNNIC. The number of Internet users grew rapidly in China from 23 million in 2000 to 384 million in 2009, representing a CAGR of 37%, according to CNNIC. During the same period, the Internet penetration rate in China increased from 2% to 29%. However, Internet penetration in China is still low compared to developed countries such as the United States. According to Gartner, Inc., an information technology research and advisory company, the Internet penetration rate in the United States was 75% as of year-end 2009.

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With broadband infrastructure being built out at a rapid pace and the Chinese population’s disposable income rising quickly, significantly more households are expected to become broadband enabled in the coming years, which should further facilitate people accessing, and spending more time watching, Internet television. According to Euromonitor, China had 389 million households in 2009, of which, according to the MIIT, only 103 million had a broadband subscription.

China also has the world’s largest number of mobile subscribers, who are increasingly using their mobile devices to access the Internet as they upgrade their handsets to smart phones and adopt new wireless Internet-enabled devices. As of June 30, 2010, China had 805 million mobile subscribers, according to the MIIT. The number of mobile subscribers in China increased rapidly from 85 million in 2000 to 747 million in 2009, representing a CAGR of 27%, according to the MIIT. During the same period, mobile penetration in China increased from 7% to 56%. The number of users accessing the Internet via mobile phones also grew rapidly from 17 million in 2006 to 233 million in 2009, representing a CAGR of 140%, and reaching 277 million as of June 30, 2010, according to CNNIC. However, since China only started to grant 3G licenses in January 2009 and 3G service rollouts only started later that year, penetration of 3G users in China is still low at 3% as of June 30, 2010, according to MIIT, which significantly lags behind the 3G penetration rate of 37% in the United States, according to Screen Digest, a third-party media research company.

The continuing development of infrastructure to support the Internet and mobile device connectivity, increasing affordability of Internet access and declining hardware prices should continue to drive increasing Internet usage in China. In addition, Chinese citizens’ rising disposable income and the Chinese government’s general support of technological advancement should spur the continued proliferation of new delivery platforms for video content.

Video Media Market in China

Television is the primary consumption channel for video media in China. 98% of all Chinese households have access to television, the majority through basic cable television connections. 85% of urban households and 78% of rural households are cable television subscribers.

Under-Developed Media Incumbents.    Within China’s highly regulated video media market, the central or local governments control nearly all broadcasters and cable operators, and a majority of cinema exhibitors. The largest nationwide broadcaster, China Central Television, or CCTV, is state-owned and broadcasts 15 channels. There are also 31 provincial level satellite channels, each with nationwide reach, and approximately 300 local television stations broadcasting over 2,000 local channels in aggregate. The signals for all of these broadcast channels are typically delivered through cable television infrastructure rather than received over the air. Despite the nationwide reach of basic cable television, there are no multiple system operators. This is due to strict government regulations regarding ownership and licenses. Additionally, the cost of any consolidation and ensuing network upgrades would be prohibitively high. As a result, local governments at the county or city level operate their own cable systems. Cable television operators primarily serve as providers of infrastructure rather than as aggregators of proprietary content. Currently, over 300 cable operators charge a basic maintenance fee of RMB18 (US$3) per month for access to all nationwide satellite channels and local channels. Other than in a small number of cities, premium channel offerings are rare. There were approximately 130 domestically produced movies released in theaters in China in 2009, and the number of international produced movies that can be imported into China on a revenue sharing basis is limited to 20 per year according to relevant government regulation.

Fragmented Content Production.    China’s content production market, partly as a consequence of the distribution market dynamics, is also highly fragmented. Historically, most television programs were produced by state-owned broadcasters for their own use. As broadcasters began to license

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content from third-party producers, each broadcaster developed its own content procurement process. Producers of video content emerged over time to meet the needs of the fragmented broadcasting landscape. Today, there are more than 2,000 television and movie production companies in China, and the figure is expected to increase. Additionally, since content syndication is uncommon in China, each content producer typically deals directly with prospective distributors. Given the imbalance in the number of content producers relative to the number of traditional distribution channels, content producers compete intensely for television airtime or movie release slots. A majority of the video content produced in China each year is never distributed through the traditional channels. For example, out of approximately 12,000 television episodes produced each year, fewer than half are ultimately broadcast. Similarly, fewer than one-third of the approximately 450 movies produced in 2009 were released in theaters.

Emergence of New Delivery Platforms.    The mass adoption of the Internet, increased broadband penetration, the rollout of 3G mobile networks, and the digitization of content have facilitated video content consumption via devices other than traditional televisions or movie screens. Video content consumption via the Internet has taken longer to develop than other forms of media content consumption due to the large size of video files, greater bandwidth requirements, and more complex end-user devices. However, we believe video content consumption via Internet-enabled delivery platforms is now on the verge of mainstream adoption, with 316 million monthly unique users of online video services in China in April 2010, according to iResearch. Examples of such new delivery platforms include PCs, wireless Internet-enabled devices such as smart phones and tablet PCs, and wired Internet-enabled devices such as Internet-enabled televisions. These new delivery devices enable a nationwide audience to access and enjoy highly personalized video content at any time and location.

Advertising Market in China

China had the third largest advertising market in the world in 2009, with a market size of approximately US$39 billion according to GroupM, a third-party media market analysis company, or approximately 0.8% of China’s GDP. However, China’s advertising market remains small on both an absolute dollar basis and as a percentage of GDP relative to that of the United States. The advertising market in the United States was approximately US$147 billion in 2009, according to GroupM, or approximately 1.1% of the United States’ GDP. Given China’s projected overall economic growth as well as the relative under-representation of advertising spend as a percentage of GDP, the growth in China’s overall advertising market is expected to significantly outpace that of more developed countries, with a CAGR of 13.4% forecast from 2009 to 2011, according to GroupM.

Television advertising is the most prevalent form of advertising in China, representing approximately US$24.3 billion, or 63% of the total advertising market in 2009, according to GroupM. As a trusted platform for advertisers to reliably reach large portions of the population alongside content perceived to be “safe,” television has been able to maintain its share of the advertising market in China over the last decade even as new alternatives have emerged. China’s television advertising market grew at a CAGR of 26.3% from 2000 to 2009, which significantly exceeded the U.S. market’s CAGR of only 1.8% in the same period.

We believe the reason that television advertising in China has grown so quickly is related to where the country is in its industrialization ramp. China’s fast growing economy has given a significant portion of the population meaningful disposable income, and advertisers are willing to invest substantially to establish brand recognition. We believe this branding economy will persist for the foreseeable future given the projected continued growth of China’s middle class and the country’s relatively short branding history.

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Despite the growth of the television advertising market over the last decade, urban Chinese consumers are increasingly obtaining their media content via the Internet. According to market research conducted by CSM Media Research, a media audience measurement research firm, daily time spent watching television in China for people in the range of 25 to 34 years old declined from 150 minutes in 2005 to 136 minutes in 2009, or by 9%. The 15 to 24 year old demographic showed a similar trend, with time spent watching television declining from 141 minutes in 2005 to 123 minutes in 2009, or by 13%. According to CSM Media Research, only 34% of China’s overall television audience is between the ages of 25 and 44, which is thought to be the population with the greatest spending power, and only 14% of the television audience has a college degree or higher level of education.

Online Advertising Market in China

The online advertising market in China has been growing much faster than the overall advertising market. According to GroupM, the online advertising market in China has grown from 3% of the total advertising market in 2005 to over 8% of the total advertising market in 2009. The total market size increased from RMB4.1 billion (US$0.6 billion) in 2005 to RMB20.7 billion (US$3.0 billion) in 2009, representing a CAGR of 50%, according to GroupM. Online video is the fastest growing segment among the various segments of the online advertising market, which is the result of significant growth in online advertising compounded by the demand of brand advertisers to find an effective and compelling online branding solution beyond simple, static display advertisements. According to iResearch, the online video advertising segment had a CAGR of 131% from 2005 to 2009, compared to a CAGR of 45% for the banner advertising segment over the same period. Taken as a single addressable market, these two segments are projected to grow at a CAGR of 42% from 2010 to 2013, reaching RMB42.5 billion (US$6.3 billion) in 2013.

We believe that Internet television has been, and will continue to be, an increasingly attractive alternative for advertisers for three primary reasons:

Ÿ First, the Internet is gaining share in terms of time spent by the audience most attractive to advertisers as measured by average age, education level and spending power. According to CNNIC, daily time spent online increased from 139 minutes in 2007 to 170 minutes in June 30, 2010, or by 22%. In addition, as of June 30, 2010, 51% of Internet users in China are between ages 20 and 39 and 67% of Internet users with broadband access are resided in coastal regions, which is the more affluent part of the country.

Ÿ Second, Internet advertising enables significantly greater interactivity, targeting capabilities and measurement of results than does traditional television advertising.

Ÿ Third, Internet television advertising offers visual impact and engagement of traditional television-like multimedia advertisements that search and banner advertising of traditional Internet portal sites can not offer.

We believe that as advertisers continue to see a shift in consumer behavior favoring Internet television, gain greater comfort with the safety of the online advertising environment, and better understand the effectiveness of online advertising solutions, they will utilize online video advertising as complementary to their television and online display advertising campaigns.

Finally, we believe the growth of China’s online advertising market will be facilitated by the further development and growing sophistication of the overall advertising ecosystem in China. Today, the market is fragmented and under-developed, with a large number of small, independent domestic agencies focusing primarily on the resale of advertising timeslots without adding significant value to advertisers. In addition, a lack of reliable, third-party tools to measure results across various advertising formats complicates international and domestic brand owners’ efforts to compare the effectiveness of various online and offline solutions. With the emergence of more sophisticated

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advertising service providers who are able to offer reliable third-party advertising measurement services, we believe brand owners will allocate more of their advertising spend to online video solutions.

Online Video Market in China

Size and Growth of China’s Online Video Market.    According to iResearch, the size of China’s online video market, as measured by total revenues, grew rapidly from RMB0.5 billion (US$78 million) in 2006 to RMB2.8 billion (US$413 million) in 2009, representing a CAGR of 74%. The following table sets forth the historical and projected size of China’s online video market and the respective year-over-year growth rates for the years indicated:

	2006		2007			2008			2009			2010E			2011E			2012E			2013E
Size of online video market (RMB billion)		0.53		0.82			1.32			2.80			4.55			6.96			10.89			16.99
Year-over-year Growth Rate		N/A		54.7	%		61.0	%		112.1	%		62.5	%		52.9	%		56.6	%		56.0	%

Source: iResearch: China Online Video Research Report 2009-2010

User Penetration and Demographics.    The online video market has a high user penetration rate in China. According to CNNIC, there were 316 million monthly unique users of online video services in China in April 2010, representing 77% of total Internet users in China during the same period. We believe we will see increasing levels of user penetration and higher levels of user engagement as Internet television continues to become more mainstream in China.

According to iResearch, China’s online video market also has more attractive user demographics than that of the traditional television market as measured by users’ age, level of education and potential spending power. Online video viewers in China, on average, are younger than traditional television viewers, but older than the broader Internet population. According to iResearch, close to 80% of the online video viewers are between 18 and 40 years of age and only 8% of online video viewers are below the age of 18. Moreover, 30% of online video viewers have a college degree or higher level of education, whereas only 14% of the television audience is similarly educated, according to CNNIC and CSM Media Research.

Market Concentration.    China’s online video market has become increasingly concentrated, with Youku accounting for approximately 40% of the total user time spent watching online videos in China during the second quarter of 2010, according to iResearch. Tudou, China’s second largest online video property, accounted for approximately 23%, and Sohu, the third largest player, accounted for approximately 9%. In 2009, the total user time spent watching online videos for Youku, Tudou and Xunlei, the third largest player in 2009, accounted for 36%, 22%, and 9%, respectively. Moreover, China’s online video market concentration continues to increase with the top three players growing their aggregate market share by approximately 4% in the second quarter of 2010 compared to 2009.

Content Characteristics.    Consumption patterns in China’s online video market vary from those of other markets. A majority of online video content viewed by users in China is in long-form. Unlike in the United States, where the top two categories of videos viewed online are user-generated content and short-form news reports, the top two categories of most-viewed online videos in China were full length movies and television serial dramas, reaching approximately 75% of total online video viewers, in 2009.

Content licensing standards in China differ from those in more developed markets. Video content is typically licensed at a flat fee per episode or unit for a specified timeframe in China, whereas revenue sharing arrangements or charging on a per stream basis are more common in the United States and other markets.

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Windowing periods are also shorter in China, which allows video content to become available online more quickly. For example, it typically takes only one to two months for movies to be made available online after their theatrical releases in China, whereas it typically takes four to 12 months in the United States. A shorter windowing period for premium video content enhances the user experience of Internet television properties and facilitates advertisers being able to advertise alongside more current and desirable content.

Favorable Value Chain Structure.    Given the fragmentation of China’s traditional television and film distribution apparatus, Internet television companies that are able to aggregate quality content and audiences are well positioned to offer a differentiated sales proposition to advertisers. Another element of this differentiated sales proposition involves being able to offer advertisers a unique and attractive brand advertising opportunity that combines the visual impact and engagement of traditional television-like multimedia advertisements with the interactivity and precise targeting capabilities of the Internet.

Monetization.    Similar to traditional video media channels, online video is primarily monetized in two ways:

Advertising.    While still a smaller market today, online video advertising is projected to be a particularly fast-growing segment of the overall online advertising market and to develop into a meaningful contributor in the near- to medium-term. According to iResearch, online video advertising spend in China increased from RMB100 million (US$14 million) in 2006 to RMB1.4 billion (US$205 million) in 2009, and is projected to grow to RMB13.1 billion (US$2.0 billion) in 2013, representing a CAGR of 76% from 2009 to 2013. The following table sets forth the historical and projected online video advertising spend in China and the respective year-over-year growth rates for the years indicated:

	2006		2007			2008			2009			2010E			2011E			2012E			2013E
Online video advertising revenues (RMB billion)		0.10		0.25			0.57			1.36			2.91			5.40			8.60			13.10
Year-over-year growth rate		N/A		150.0	%		128.0	%		138.6	%		114.0	%		85.6	%		59.3	%		52.3	%

Source: iResearch

Subscriptions.    The rapid growth of China’s online video advertising segment only represents a portion of the overall Internet television market – albeit an important part of the market. We believe that as more premium movie and television content becomes available online, consumers are more likely to use subscription-based online video services for regular or one-off access to such premium content. According to iResearch, online video subscription fees totaled approximately US$160 million in 2009.

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BUSINESS

Overview

We are the leading Internet television company in China. Our Internet television platform enables consumers to search, view and share high-quality video content quickly and easily across multiple devices. We believe our continuous focus on offering a superior user experience has enabled us to become the largest Internet television company in China and elevated our Youku brand, which stands for “what’s best and what’s cool” in Chinese, to be the most recognized online video brand in China according to a 2010 survey conducted by an affiliate of the Chinese Academy of Sciences. According to iResearch Consulting Group, or iResearch, a third-party market research firm, we had approximately 203 million monthly unique visitors from homes and offices in September 2010 and approximately 61 million monthly unique visitors from Internet cafes in August 2010. We had a 40% market share in terms of total user time spent viewing online videos in China during the second quarter of 2010, while our closest competitor accounted for a 23% market share during the same period, according to iResearch. In 2009, we had an implied market share of approximately 14% in terms of online video advertising spend in China, based on iResearch’s estimated data of total online video advertising spend in China.

As a video content aggregator in China, we are well-positioned to benefit from the market growth potential in China’s highly fragmented and regulated content production and distribution markets, where less than half of the professionally produced television serial dramas and movies each year are aired on television or released in theaters. We have built a large and comprehensive online video content library. The majority of the videos on our website are professionally produced content, such as television serial dramas, movies, variety shows, current events reports and music videos, and the remainder is comprised of user-generated content and in-house productions. We license video content typically at fixed rates for a specified term. The average term of licenses varies depending on the type of content, with movies and television serial dramas having an average term of approximately 2.5 years and 2 years, respectively. We generally renew our licenses when they expire. As of September 30, 2010, our video content library contained more than 2,200 movie titles, 1,250 television serial drama titles and over 231,000 hours of other professionally produced content, including 194 variety shows.

Our mission is to become the primary source of video content for the Chinese population across any Internet-enabled device. Leveraging our proprietary CDN comprised of over 5,500 servers, we provide fast streaming and upload speeds. At the same time, our comprehensive content library, coupled with an easy-to-use online interface, facilitates our providing a superior user experience, according to a 2010 survey by China Internet Week, a magazine affiliated with the Chinese Academy of Sciences. As a result, our Internet television platform attracts a nationwide audience, the majority of which resides in China’s more affluent urban areas.

We currently derive substantially all of our revenues from online advertising services. Our advertising solutions present brand advertisers with attractive opportunities to combine the visual impact and engagement of traditional television-like multimedia advertisements with the interactivity and precise targeting capabilities of the Internet. We strive to promote a healthy advertising environment on our website to attract mainstream brand advertisers. We believe our differentiated sales proposition has contributed to the rapid increase in the number of international and domestic brand advertisers, which increased from 7 in 2007 to 141 in 2008 and to 303 in 2009, and from 230 in the nine months ended September 30, 2009 to 343 in the nine months ended September 30, 2010.

The desirable demographic characteristics of our large user base as well as our differentiated advertising solutions and environment are key factors driving the fast growth in our online advertising

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revenues. We believe that wireless and web-based subscription services, which we plan to formally launch in the foreseeable future, will also increasingly contribute to our net revenues over time. We launched Youku.com in December 2006. As is customary in the advertising industry in China, we offer commissions to third-party advertising agencies who purchase our advertising services and recognize revenues net of these commissions. Our net revenues increased from RMB1.8 million in 2007 to RMB33.0 million in 2008 and to RMB153.6 million in 2009, and increased from RMB99.8 million in the nine months ended September 30, 2009 to RMB234.6 million (US$35.1 million) in the nine months ended September 30, 2010.

Due to PRC legal restrictions on foreign ownership and investment in value-added telecommunications services and advertising businesses in China, we operate our business primarily through our consolidated affiliated entities in China. We do not hold equity interests in our consolidated affiliated entities. However, through a series of contractual arrangements with these consolidated affiliated entities and their respective shareholders, we effectively control, and are able to derive substantially all of the economic benefits from, these consolidated affiliated entities.

Our Strengths

We believe that the following strengths contribute to our success and differentiate us from our competitors:

The leading Internet television company in China with strong brand recognition

We are the leading Internet television company in China. According to iResearch, our Youku.com website accounted for approximately 40% of the total user time spent viewing online videos in China during the second quarter of 2010, while our closest competitor accounted for approximately 23% market share during the same period. We also ranked first among all online video companies in China in terms of the number of monthly unique visitors, user reach, usage frequency, total video views and total page views during the second quarter of 2010, according to iResearch. We were the third largest website in China in terms of total user time spent browsing the website during the same period, according to iResearch. We have established strong brand recognition among Internet users in China. Our Youku brand was named the most recognized online video brand according to a survey conducted by an affiliate of the Chinese Academy of Science in 2010. Capitalizing on our leading market position and strong brand recognition, we have succeeded in attracting an increasing number of users and advertisers. According to iResearch, the number of our monthly unique visitors from homes and offices increased from approximately 50 million in December 2007 to approximately 82 million in December 2008 to approximately 154 million in December 2009 and to approximately 203 million in September 2010. The number of our monthly unique visitors from Internet cafes increased from approximately 36 million in December 2008 to approximately 59 million in December 2009 and to approximately 61 million in August 2010. Our market share in terms of total user time spent viewing online videos in China increased from 36% in 2009 to 40% in the second quarter of 2010, according to iResearch. The number of our brand advertisers increased from 7 in 2007 to 141 in 2008 and to 303 in 2009, and from 230 in the nine months ended September 30, 2009 to 343 in the nine months ended September 30, 2010.

Network effects and economies of scale resulting in high barriers to entry

We believe the network effects and economies of scale we have achieved are difficult to replicate and create high barriers to entry for potential competitors.

Ÿ Network Effects.    Our large library of diverse, high-quality video content and our superior user experience have enabled us to attract a large number of Internet users with desirable demographic characteristics for advertisers. In addition, we enjoy the viral marketing benefits brought by widely distributed Youku videos embedded in third-party websites. Our expanding

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advertiser base drives greater operating cash flow that allows us to fund additional investments in more video content and advanced technologies, which further enhance our user experience. The virtuous cycle has allowed us to maintain our leading market position and increase our market share. In addition, our large user base forms a foundation for our wireless and web-based subscription services, which we recently trial-launched and expect to expand in the foreseeable future.

Ÿ Economies of Scale.    The economies of scale we have achieved allow us to enjoy various cost advantages. For example, since the license fee for video content is typically fixed for a specified term in China, our high user traffic allows us to enjoy a relatively low content acquisition cost per advertising inventory unit. We also have a bandwidth cost advantage due to our high user traffic and our proprietary CDN. Leveraging our strong brand name and large user base, we believe we have stronger pricing power, as evidenced by the relatively lower commission rates that we pay to third-party advertising agencies and relatively higher cost per thousand impressions, or CPM, that represents unit price per thousand views of an advertisement that we are able to charge, as compared to the industry average.

Large and comprehensive video content library tailored to Chinese users

We believe we are well-positioned as a video content aggregator in China’s highly fragmented and regulated content production and distribution markets. Due in part to the video distribution bottleneck of China’s traditional media networks, less than half of the professionally produced television serial dramas and movies each year are aired on television or released in theaters. As one of the earliest online video companies in China to receive the requisite licenses for video sharing and syndication, we have built a large and comprehensive video content library through long-term cooperation with more than 1,500 media content partners. As of September 30, 2010, our content library contained more than 2,200 movie titles, 1,250 television serial drama titles and over 231,000 hours of other professionally produced content, including 194 variety shows. We tailor our video content library to the distinct content consumption patterns in China, where the top two categories of most-viewed online videos are television serial dramas and movies, particularly those produced in mainland China, Hong Kong, Taiwan and Korea. The majority of the videos on our website are professionally produced content, such as television serial dramas, movies, variety shows, current event reports and music videos, and the remainder comprise user-generated content and in-house productions.

Substantial investments in infrastructure, know-how and products and services to deliver a superior user experience

We made substantial investments in infrastructure and know-how early in our company’s history, which enables us to deliver a superior user experience. Today, we operate our proprietary CDN comprised of over 5,500 servers to support the largest online video user traffic in China, according to iResearch. Our state-of-the-art technologies and know-how provide our users with fast streaming and upload speeds. In addition to our large video content library, we offer a range of products and services to users. For instance, we have developed Soku, a proprietary video search engine, to enable users to search for video content on Youku.com and third-party websites. We also help users navigate our database and find videos of interest by creating popularity ranking indices ( ) and interest-based video channels. We provide social features, such as community webpages and video-sharing and comment tools. Our self-developed, proprietary peer-to-peer, or P2P, downloadable software client, iKu, further accelerates upload and download speed and enhances viewing experience for users. As of September 30, 2010, the number of daily online viewers who used our iKu software reached six million, according to iResearch.

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Differentiated sales proposition attracting mainstream brand advertisers

We believe our large user base and desirable user demographics as well as our attractive advertising solutions and environment are key factors driving the fast growth in our online advertising revenues. As the leading Internet television company in China, our platform enables access to a large nationwide user base in China, and a majority of our monthly unique visitors are located in China’s more affluent urban areas. We attract a significant number of urban and educated Internet users, making our website an attractive media platform for mainstream brand advertisers. Our advertising solutions present brand advertisers with attractive opportunities to combine the visual impact and engagement of traditional television-like multimedia advertisements with the interactivity and precise targeting capabilities of the Internet. By presenting advertisement in a minimally intrusive manner, such as the controlled maximum number or length of advertisements in videos of certain length, we distinguish ourselves with better user experience, which typically leads to more user traffic. We also strive to promote a healthy advertising environment on our website by screening out “racy,” unhealthy or derogatory video content to avoid adverse reputational effects on our advertisers, and such proposition helps us attract mainstream brand advertisers. In addition, we selectively choose our brand advertisers and have in the past turned down advertising business from advertisers that are perceived to lack positive brand recognition in order to avoid negative branding association for our mainstream brand advertisers. We have built an experienced sales team consisting of salespeople with prior working experience at Chinese Internet companies, television stations, members of American Association of Advertising Agencies, or 4As, and domestic advertising agencies.

Seasoned management team with a proven track record

With extensive experience and knowledge in China’s Internet, media and advertising industries, our founder and chief executive officer, Victor Koo, and other senior management have led us in becoming the leading online video company in China. Mr. Koo has over 12 years of experience in Internet and media-related industries and was formerly the president, chief operating officer and chief financial officer of Sohu.com Inc., a leading Internet portal in China, before he founded our company in 2005. Our senior management, including our chief executive officer, chief technology officer, chief financial officer and senior vice president of operations and chief editor, has an average of 11 years of experience in China’s Internet, media and advertising industries. Most of our senior management members have worked together at Youku since 2006 and many worked together prior to the establishment of our company. In addition, our management has extensive experience navigating the highly regulated media environment in China. We believe that the extensive industry experience and strength of our senior management will allow us to continue to execute our growth strategies to achieve a higher level of success. With our corporate slogan “ ” (everybody gets a share), we have also developed a strong company culture that encourages teamwork, accountability, effectiveness and a strong commitment to providing best experience to our users and customers. We were named as one of the “20 Best Employers in China in 2009” by the Fortune China magazine.

Our Strategies

Our mission is to become the primary source of video content for the Chinese population across any Internet-enabled device. We intend to achieve our mission by growing our content library and user base, enhancing our brand and better monetizing our user traffic. More specifically, we plan to implement the following strategies:

Further improve our user experience

We plan to enhance and expand our product and service offerings to further improve our user experience. We intend to refine our proprietary video search engine and specialized channels to

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enable our users to find and view videos of interest more quickly and easily. As China’s telecommunications infrastructure further develops, we intend to provide our users with more high-definition content. In addition, we plan to enhance the social and personalization elements of our website, so that users tend to return more often to our website, spend longer time in each browsing session on our website and become increasingly dependent on our services. By enhancing our data analysis capabilities, we seek to provide users with more personalized content based on their information and behavior.

Increase the breadth and depth of our video content library

Based on users’ evolving demands, content availability and cost effectiveness, we will fine tune the presentation of content on our webpages as well as the mix of our content library. We intend to cooperate with more third-party professional content providers to license additional premium content, such as newly released television serial dramas and movies. We plan to expand our content syndication team and further cultivate our expertise in different categories to enhance our content selection skills and to drive greater user traffic per content unit. We also intend to expand our in-house production capacity and promote user-generated content, such as Youku Paike ( ) and Youku Niuren ( ).

Expand our infrastructure and optimize our services across Internet-enabled devices

We plan to make additional investments in our infrastructure, expand our proprietary CDN and enhance our P2P technology. In particular, as our user base and traffic grow, we intend to acquire additional bandwidth capacity and servers. We have developed and have been applying the P2P technology in our operation, and therefore, we expect the product development expenses related to the P2P technology to increase marginally. As existing technologies converge and new technologies emerge, we intend to continue developing and introducing products and services for and on other media platforms, such as mobile phones and tablet devices. For example, we intend to develop new relationships and strengthen existing relationships with telecommunications operators and manufacturers of mobile phones and other Internet-enabled devices to have our software or applications pre-installed on the devices they produce and capture these new market opportunities.

Further enhance our brand recognition

We intend to leverage the network effects inherent in our business to further enhance our brand recognition. As more users watch videos on our website and more third-party website publishers embed our video player with the Youku brand prominently displayed, we believe Youku will become synonymous with Internet television in China. Similarly, continued acquisition of premium content will reinforce our brand’s leadership position in the online video market. We expect Youku to become a leading distribution outlet for low-cost video content about current and influential events from across China, which should further bolster our brand’s media cachet. For instance, by promoting our Youku Paike service, we encourage users to record and upload exciting or current events that they witness. We also plan to enter into more cross-promotional arrangements with other websites and traditional media outlets to both reinforce our brand with existing users as well as to broaden our exposure to consumers who may not yet be Youku users. Finally, we will continue to promote our brand through public relations campaigns and Youku-sponsored events, such as industry conferences and advertising conventions.

Expand and diversify our revenue sources

We intend to expand our advertiser base and increase the spend per advertiser by enhancing our sales and marketing efforts. We intend to take initiatives to better understand advertisers’ needs

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through regular dialogue with advertisers and their agencies, provide them with customized solutions and help them design more efficient and effective advertising strategies. In addition, we plan to expand our direct sales force and customer service team to provide better customer service to, and build long-term relationships with, existing and new advertisers. Meanwhile, we will further develop our relationships with third-party advertising agencies and incentivize them to identify and refer new advertisers to us. We also intend to engage third party research organizations to conduct more research to validate the efficacy of advertising on our website.

Furthermore, we intend to diversify our revenue sources, including the wireless and web-based subscription services, which we plan to formally launch in the foreseeable future when the testing is satisfactorily completed, and video-enabling services for e-commerce. As the product development costs for our wireless and subscription services have been largely expensed, we expect the incremental costs related to improving such services to be marginal. We are working with third-party payment processing agencies to implement more payment solutions for our customers. We also intend to license more premium video content, such as high-definition television serial dramas, movies and popular live events, which we believe will attract more customers to use our subscription services.

Our Users

Our large and comprehensive video content library and user-friendly online interface have enabled us to attract more monthly unique visitors than any other online video company in China. In September 2010, we had approximately 203 million monthly unique visitors from homes and offices. In August 2010, we had approximately 61 million monthly unique visitors from Internet cafes. A majority of these visitors reside in China’s more affluent urban areas. We do not purchase user traffic from third parties. A majority of user visits to our website originate from direct navigation, with the remainder from organic search results or third-party website links connecting to us.

Products and Services for Users

Our Internet television platform is designed to enable our users to search, view and share online video content quickly and easily. We offer the following products and services at Youku.com to users.

Online Video Content

We have a large and comprehensive video content library consisting primarily of professionally produced content including television programs and movies, and to a lesser extent user-generated content and in-house productions. We currently focus on further expanding our collection of professionally produced content, particularly popular and in-season television serial dramas, movies and variety shows.

Professionally produced content.    A majority of our user traffic is attributable to professionally produced content primarily across the following five categories: television serial dramas, movies, current event reports, variety shows and music videos. As of September 30, 2010, we licensed more than 2,200 movie titles, 1,250 television serial drama titles and over 231,000 hours of other professionally produced content, including 194 variety shows. The providers of professionally produced content in China are highly fragmented and primarily include media production companies, professional studios, copyright distributors, television stations and music companies. We had established long-term relationships with more than 1,500 professional media content providers as of September 30, 2010, either directly or through third-party copyright distributors. We seek to offer users a diverse collection of television serial dramas and other programs and movies. For example, we offered approximately 25,000, 6,700 and 4,000 episodes of television serial dramas produced in (i) mainland China, (ii) Korea, and (iii) Hong Kong and Taiwan, respectively, as of September 30, 2010.

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We set our content syndication milestones each year to expand our content library primarily based on our content budget and the development of bandwidth infrastructure in China:

Ÿ During 2006 and 2007, we mainly licensed short-form content from television stations, independent studios and record companies.

Ÿ In 2008, we focused on licensing library television serial dramas and movies.

Ÿ In 2009, we started to license current television serial dramas and recent post-theatrical release movies and commenced cooperation with major international media production companies.

Ÿ In 2010, we started to license professionally produced content relating to sports, animations and international movies and television programs. For example, we licensed from China Network Television all of the soccer games of the 2010 FIFA World Cup and provide them on our website on demand.

We license video content typically at fixed rates for a specified term. The terms of our licenses for professionally produced content generally range from three to five years for movies and one to three years for television serial dramas. The average term of licenses varies depending on the type of content, with movies and television serial dramas having an average term of approximately 2.5 years and 2 years, respectively. We generally renew our licenses when they expire. Payments of licensing fees are generally made in installments throughout the duration of the licenses. In certain cases, we have the right of first refusal to purchase new content produced by the licensor.

Guided user-generated content.    We have supported the grassroots culture of user-generated content by launching two prominent and easy-to-use programs: Youku Paike ( ) and Youku Niuren ( ). Youku Paike was founded on the basis of “looking around and sharing what you see with the world.” Participants in Youku Paike use easily-accessible video recording devices, such as video cameras and mobile phones, to record exciting or current events and share them on our website. Youku Niuren, on the other hand, serves as a platform for our users to share videos recording ordinary people with unusual talents. We guide users to generate specific types of content by, among other things, sponsoring competitions based on certain themes, such as current events or timely topics. We grant daily awards to winners of the competitions. Some of these videos attract large audiences and are subsequently broadcast by major television stations. Since 2009, we have also hosted Youku Niuren galas in Beijing and Shanghai and granted awards to the most talented competitors. We believe our guided user-generated content effectively promotes our brand and improves the quality of our content library.

Given the short history of the use of video recording devices in China, we encourage people to participate in sharing user-generated videos by offering an easy-to-use video upload platform, featuring high uploading speed and capacity. Our platform allows users to upload videos larger than one gigabit on Youku.com with just a few clicks. It supports synchronized multi-uploading, allows resumption of disrupted uploading by automatically connecting the disrupted pieces and is compatible with most video formats.

In-house productions.    As one of the few Internet television companies in China with a permit for radio and television program production and operation, we produce a wide spectrum of content, including sponsored web serial dramas, reality shows, interviews and variety shows. We promote our in-house productions under our prominent brand Youku Originals ( ).

We focus on producing web serial dramas and variety shows for our young, educated and urban user base. Many of these programs are partially funded by proceeds from embedded product placements. We strive to make such product placements more effective by cooperating with reputable

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producers, directors and media organizations and creating storylines consistent with the brands’ or products’ marketing initiatives.

Online Video Search and Discovery

Utilizing our search technology and data processing infrastructure, users can find relevant video content and associated information on Youku.com quickly and easily. The Youku.com homepage prominently features a fast-loading search box. After entering a video search query, users receive a list of search results comprised of thumbnail snapshots along with relevant information, such as a video’s title, release date, number of user comments, resolution and video play statistics. Depending on user preferences, search results can be ordered based on criteria such as “most recent,” “most played,” “most commented” and “most bookmarked by members,” and sorted by content category. In April 2010, we commenced beta testing of our video search website Soku.com. Once beta testing is completed, our users will be able to use our proprietary online video search engine to discover content on Youku.com as well as on third-party websites. In addition to providing general access to our large video content library, our video search technology also enables other features such as advanced search. Advanced search allows users to tailor search queries and narrow results by specifying keyword phrases to be included or excluded, video categories in which to search, the location of keywords, or video play statistics.

We also provide products and services, such as interest-based video channels and popularity ranking indices ( ), to facilitate navigation and content discovery on our website. Our back-office content editors routinely organize our video content into interest-based channels, including Movies, Television Serial Dramas, Variety Shows, Automobiles, Music, Fashion and Style, Travel, Sports and Technology. Each of these channels is easily accessible from our homepage. If a user wants to watch a specific genre of videos, such as music, he or she can access such content through our “Music” channel. On our homepage, we also promote Youku popularity ranking indices ( ), which rank videos based on their popularity or other specified statistics.

Youku Community

We provide online community services to facilitate user communication and interaction. Our online community features help enhance user loyalty and promote beneficial network effects. Specifically, we enable the following functionalities:

Ÿ Video Space—users can create a personalized video sharing space, and other users can begin to follow that personalized video sharing space, effectively creating a personalized channel based on the Video Space curator’s preferences. Users of our Video Space functionality can manage video uploading to their Video Space, their online friends list, visitor comments and online chats within their Video Space. As of September 30, 2010, we had 76 million Video Space users, including many celebrities and media partners;

Ÿ Real Time Commenting—users can comment on or rate videos by either clicking on “vote for” or “vote against” buttons or by posting comments below the video for other users to see. Comments made about a video, such as how many people voted for or against it, help other users make an informed decision on whether to watch the video; and

Ÿ Youku Kan Bar (Watch Bar) ( )—users can exchange their perspectives and share their knowledge and experiences with other users through a searchable community message board. Through Youku Kan Bar, users can search and share messages and videos under each topic, participate in various interactive activities such as online polls and post messages. Youku Kan Bar covers popular topics such as society, sports, entertainment and fashion.

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Our Other Products and Services

We continuously develop and introduce new products and services to make Youku.com more attractive to current and prospective users. In early 2010, we trial-launched subscription-based online video services featuring advertisement-free premium content, such as high-definition movies. In addition, we have tested using our platform to allow users to access live, streaming events, such as concerts, on a pay-per-view basis. Finally, our product development team continuously strives to extend our platform to be relevant to new technologies and to capture new market opportunities. Recent, notable platform extensions include:

Ÿ Wireless Video Services—users can now watch Youku.com videos on their 3G mobile phones free of charge from us. We have entered into agreements on a non-exclusive basis with China’s major mobile phone manufacturers to develop and pre-install Youku software client on a variety of major 3G mobile phones. We estimate that since the end of 2009, Youku software clients or widgets have been pre-installed on approximately three million Internet-enabled mobile phones. We also provide free software clients on our website, or the websites of Apple’s App Store and Google’s Android Market, for our users to download and install on their 3G mobile phones. We have also entered into agreements with China’s major wireless Internet providers on a non-exclusive basis to enable users to watch pay-per-view premium content on their mobile devices;

Ÿ Youku iPhone Channels and iPad Services—we have liaised with local broadcaster CNLive.com to provide on a pilot basis China Unicom’s iPhone subscribers with four Youku video channels: Youku Theatre, Youku Entertainment, Youku Originals and Youku Life. Although we have not entered into a written contract with CNLive.com, we intend to do so when the service model becomes more mature. By logging onto iPhone.wo.com.cn and choosing “Mobile Television,” users can access our online video resources through their iPhones. In addition, our users can access high-definition videos on Youku.com through iPad; and

Ÿ P2P Downloadable Software Client “iKu”— users can download this Youku-developed, proprietary software and install a Youku interface on their computer desktops, download or upload videos from or to our website faster, and transcode videos into different formats, such as mp4 and 3gp, so that users can transfer the videos to portable devices and watch them anytime. As of September 30, 2010, the number of daily online viewers who used our iKu software reached six million, according to iResearch.

Our Advertisers and Customers

We serve a broad base of advertisers consisting of leading international and domestic companies. The number of our advertisers increased significantly from 7 in 2007 to 303 in 2009, and from 230 in the nine months ended September 30, 2009 to 343 in the nine months ended September 30, 2010. They operate in a variety of industries, including fast moving consumer goods, information technology services, automobile manufacturing, electronics, telecommunications, financial services, e-commerce and online games. Substantially all of our advertisers purchase our online advertising services through third-party advertising agencies. We strive to create and maintain a healthy advertising environment on our website to attract mainstream brand advertisers in part by selectively screening advertisers. We have in the past turned down advertising business from advertisers perceived to lack positive brand recognition in order to avoid negative branding association for our mainstream brand advertisers.

In early 2010, we trial-launched subscription-based online video services featuring advertisement-free premium content, such as high-definition movies. In addition, we have tested using our platform to allow users to access live, streaming events, such as concerts, on a pay-per-view basis. By paying to

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watch live events or high-definition movies, some of our users have become our customers. Payments for these services are currently made by major third-party gateway payment processing agencies.

Products and Services for Advertisers and Customers

We generate revenues primarily from online advertising services and, to a limited extent, subscription- or pay-per-view-based online video services. We focus on providing advertisers with cost-effective and targeted advertising solutions.

Online Advertising Services

Our online advertising services include in-video, display, sponsorship and other forms of advertisements. In-video advertisements appear at certain times during the playback of a video. These video advertisements can be pre-roll, post-roll, mid-roll or pause advertisements. Display advertisements can be delivered alongside a video and may take the form of graphical banners or text hyperlinks. Other forms of advertisements include product placements in Youku produced web video series, sponsored live events or Youku-produced viral videos.

Advertisers are increasingly seeking measurable results to maximize their return on investment. Our advertising solutions present brand advertisers with attractive opportunities to combine the visual impact and engagement of traditional television-like multimedia formats with the interactivity and precise targeting capabilities of the Internet.

Ÿ Innovative Targeting.    Some targeting solutions are unique to the online video platform and cannot be transplanted to other media platforms. We are able to track and monitor an advertiser’s campaign on a real-time basis and can make adjustments to enhance its efficacy within parameters specified by the advertiser. We utilize targeting strategies to more efficiently reach users with a desired demographic. Our targeting strategies enable advertisers to reach targeted users based on any or a combination of standards, including the demographic information about the user, the nature of the video’s content, the geographic location of the user, the time of day at which a video is being watched, or the keywords associated with the video. For example, in the case of a user watching a music video by a singer who is also a spokesperson for a brand, we can deliver an in-video advertisement featuring such brand. In this way, we supplement and enhance the advertiser’s campaign. Our video channels also help segregate videos based on users’ interested content, which allows us to deliver advertisements tailored to the viewers of different channels;

Ÿ Viral Video Advertisements.    Advertisements that use existing social networks to promote brand awareness through self-replicating viral processes can take various forms such as videos, online polls or interactive Flash games. Due to their creative plots and potentially amusing effects, viral video advertisements sometimes attract more user traffic than non-commercial videos and therefore are desirable advertising solutions; and

Ÿ Product Placements.    As an online video provider with a permit for radio and television program production and operation, we are able to produce web-based content, such as web serial dramas, interviews and variety shows, with embedded product placements. If a program’s storyline is consistent with a brand’s or product’s marketing initiatives, a product placement can have strong branding effects on viewers.

Subscription-based and Other Services

We trial-launched a subscription-based online video services in early 2010, which enables users to watch advertisement-free premium content, such as high-definition movies. Though traditional

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television-like video advertisements are specifically omitted from content that is part of our subscription-based services, advertisers may use other forms of advertising, such as product placements in a web drama produced by us, to reach potential customers. In addition, we are working with e-commerce companies such as Taobao to provide video demonstrations of merchandise for their premium retail members. These members can upload and manage videos from a client interface built into our e-commerce partners’ websites without logging into our website. We share revenues with these partners for the service fees they charge their members. New advertising formats such as these will supplement our existing online advertising solutions.

In addition, we derive a small portion of our net revenues from sub-licensing certain content for which we license from content providers the exclusive rights for both self-use and sub-licensing. After our legal department confirms that the sub-licensing arrangement is authorized under the original licensing agreement, we sub-license the licensed content within its authorized scope to other video websites and receive sub-licensing fees from such websites.

Advertising Sales

We sell our advertising services primarily through third-party advertising agencies, including members of 4As and leading Chinese advertising agencies. As a relatively young media company, we intend to strategically leverage advertising agencies’ existing long-term relationships and network resources to increase our sales and expand our customer base. Therefore, in order to establish long-term strategic cooperation with third-party advertising agencies, we typically enter into individual advertising agreements with such third-party advertising agencies for each advertiser. Depending on the type of advertiser and content, the duration of an advertising agreement typically ranges from one to three months. While all executed sales need to be confirmed by the end-advertiser, substantially all of our advertising sales agreements are executed with third-party advertising agencies that represent the end-advertisers. By adopting this dual-track sales model, we are able to maintain good relationships with both the end-advertisers and their advertising agencies that help identify and refer new advertisers to us. Beijing Hylink Advertising Co., Ltd., a third-party advertising agency, accounted for approximately 11% of our net revenues in 2009. No other party accounted for more than 10% of our net revenues in 2009 and the nine months ended September 30, 2010.

Whereas many Internet companies in China have historically priced their advertising solutions using a time-based rate card, we employ a CPM-based model for our in-video advertisements. This approach is similar to that of traditional television in that the advertisements are priced based in part on the user reach and viewing frequency. It allows advertisers to better compare the online and offline advertising solutions at their disposal. It also enables us to better monetize our growing user base and provide measurable results to our advertisers.

Leveraging our large user base and attractive user demographics, we have been able to demonstrate pricing power relative to other online video companies. The list prices of our advertising services depend on various factors, including the form of advertising, specific targeting requirements, duration of the time slot purchased and popularity of the content in which the advertisements will be placed. Prices for the aggregate time slots purchased by each advertiser or advertising agency are fixed under sales contracts, typically at a discount to our list prices. We review and adjust the list prices annually.

We have built an experienced sales team consisting of salespeople with prior experience at Chinese Internet companies, television stations, members of 4As and domestic advertising agencies. As of September 30, 2010, we had approximately 230 sales representatives and supporting personnel in our Beijing, Shanghai and Guangzhou offices. Our sales force is organized by both region and industry and renders a spectrum of services. Our sales representatives are responsible for direct and

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channel sales, and our back-office sales support personnel focus on sales planning, creative productions, account administration and execution. Our sales force assists advertisers in structuring advertising campaigns by analyzing the advertisers’ target audiences and marketing objectives. We conduct market research, consumer surveys, demographic analysis and other advertising industry research to help our customers design effective advertising strategies. On our own initiative or at our customers’ request, we also purchase or commission studies or surveys containing relevant market data from third-party market research firms.

The compensation for our salespeople is based in part on the sales revenues they achieve. We provide regular in-house education and training to our sales team to help them provide current and prospective advertisers with comprehensive information about our services and the advantages of using our advertising solutions. Our performance-linked compensation structure and career-oriented training help motivate our salespeople.

Marketing and Brand Promotion

We have built our brand with only modest marketing expenditures to date. Our user base has grown primarily through word-of-mouth. We focus on continuously improving the quality of our products and services as we believe satisfied users and customers are more likely to recommend our products and services to others. Our market position benefits significantly from our large user base and our strong brand recognition throughout China.

We have initiated various marketing activities to further promote our brand awareness among existing and potential users and customers. For example, we market our services through direct marketing, trade shows and other media events, which include:

Ÿ Hosting or attending various public relations events, such as advertisement industry-related seminars and conferences, to promote our brand image and the value of online video advertising. For example, in January 2010, we hosted a Youku Niuren Ceremony featuring the most talented competitors from our year-long Youku Niuren competition;

Ÿ Hosting regular workshops for major advertising agencies and existing and potential customers, highlighting the advantages, flexibility and quality of our online video platform and services; and

Ÿ Hosting an annual sales award gala for the most successful online video marketing campaigns.

In addition, we benefit from cross-promotional arrangements with third-party websites and television stations, under which we cooperate to help improve each other’s brand recognition. We also market our products and services by displaying our name and logo in Youku media player screens when users embed our content in third-party websites.

Technology and Infrastructure

We believe our proprietary technologies and infrastructure are critical to our success. We have made significant investments in developing a proprietary, scalable technology platform that differentiates our online video distribution system.

Architecture

Our proprietary CDN supports the largest online video user traffic in China, according to iResearch. Since 2006, we have invested significantly in CDN construction to support faster delivery of our online video content. Until 2008, most of our domestic competitors had primarily been leasing

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bandwidth from CDN providers. As a pioneer in implementing this technology, we established a more stable infrastructure and gained valuable CDN operations experience. While we rely mainly on CDN technology, our self-developed, proprietary downloadable software client, “iKu”, which is built on P2P technology, also facilitates content delivery to users.

CDN Technology.    CDN technology utilizes additional data storage to maintain copies of popular content at the “edge” of the Internet, which enables end-users to more quickly access that content. CDN technology facilitates faster responses to users’ requests for content, avoids buffering and associated delays caused by low bandwidth and user congestion, and is therefore critical to the success of online video providers.

By hosting our Internet data centers along the major nodes of the transmission backbones operated by the local subsidiaries of China’s telecommunications carriers, we seek to maintain high standards in terms of delivery quality and speed as video content is transmitted from our servers to users throughout China. We had established approximately 36 Internet data centers nationwide as of September 30, 2010, which contribute significantly to our fast streaming speeds and reliable viewing experience. Our servers are colocated at service sites of the local subsidiaries of the major domestic telecommunications carriers, which provide a stable power supply and maintenance for our servers.

Supported by our CDN technology, our proprietary know-how contributes to our efficient content distribution, bandwidth utilization and redundancy control:

Ÿ While some of our competitors still use domain name system, or DNS, based load balancing, which could cause overload or unnecessary redundancy, we have developed our own real-time scheduling algorithm, which enables us to guarantee linear scalability and even load balance across our edge servers, whose primary tasks are to answer domain name inquiries, replicate and refresh content, receive and forward uploads from end-users, record usage information and provide network performance data.

Ÿ We use a two-dimensional information (ISP/geography) monitoring system to direct each user’s request to the appropriate CDN edge server to facilitate the fastest response.

Ÿ We were an early adopter of video segmenting technology, by which we mandate a maximum length of seven minutes for each video downloading. As some users do not finish watching a video after opening it, we seek to control the loading speed relative to the user’s viewing pace to avoid waste of bandwidth.

Ÿ We have implemented efficient backup data storage and error allowance mechanisms. Our videos are stored in multiple geographic locations so that a regional system failure would not affect our regular service. Failed nodes can be restored in a relatively short period of time while users in the affected region can continue to enjoy our services from other nodes.

P2P Technology.    P2P is an alternative Internet content delivery technology. We incorporated P2P technology into “iKu,” our self-developed, proprietary downloadable software client, as a supplement to our CDN transmission infrastructure. As of September 30, 2010, the number of daily online viewers who used our iKu software reached six million, according to iResearch. P2P technology allows content sharing among all the users in the network, and every personal computer in the P2P network benefits from other users by obtaining content directly from the virtual community instead of from the central server. Under the P2P framework, a content subscriber is required to contribute as a server while receiving video content as an end-user. Though P2P technology has certain disadvantages as compared to a CDN, such as dependence upon installation of P2P software, limited content selection and vulnerability to Internet hacking, it allows users to gain faster access to the most popular content by directly obtaining this content from nearby users who have it stored locally.

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Advertising Management Systems

Our advertising management system tracks the reach, delivery duration and frequency, targeting and quantity of advertisements delivered. Our system supports third-party monitoring of our advertising efforts by enabling retrieval of real-time advertisement delivery data using certain system application interfaces. We have also introduced an advertising results forecasting system that is being used in an increasing number of large advertising campaigns on our website. This system is designed to help optimize our advertisers’ strategy by forecasting the results of a given campaign, factoring in the covered audience and the frequency and reach of such campaign.

Content Monitoring and Copyright Protection

We are committed to the protection of third-party copyrights. The online video industry in China suffers from copyright infringement issues and online content providers are frequently involved in litigation based on allegations of infringement or other violations of copyrights. We have invested significantly in copyright protection technologies. We have a content screening team of over 300 contract employees dedicated to screening and monitoring the content uploaded on our website to help ensure that no content that may be deemed to be prohibited by government rules and regulations is posted and to promptly remove any allegedly infringing content once we receive proper notification from the legitimate copyright owner. We provide training to these contract employees and supervise and monitor their work. After a user registers and before each upload, we require the user to click a check box to confirm that the content to be uploaded is in compliance with the terms and conditions set forth in the user agreement, to guarantee that he or she is the copyright owner or has obtained all necessary consents and authorizations for such content and he or she is responsible for such content. Pursuant to the user agreement, each user agrees to indemnify us for all damages arising from third- party claims against us caused by violating or infringing content uploaded or linked by the user. If we find a user has violated the user agreement, applicable laws or regulations or other parties’ legal rights, we may terminate the user account and block the user’s future uploads without prior notice.

We implemented monitoring procedures to remove infringing content, and such procedures include: (i) technology screening, where a video fingerprint system we jointly developed with a U.S. software company compares newly uploaded videos with fingerprint trails of copyrighted videos in our system and screens out those that have piracy issues, a text filtering system screens content based on pre-set key words, and another filtering system automatically screens out pornographic and obscene content based on colors and images; (ii) manual review, where the content that passes the technology screening is reviewed by the content screening team on a 24-hour, 7-day basis, and the flagged content identified by our technology is reviewed and confirmed that it can be released; and (iii) back-office professional supervision, where certain professional content providers who we granted access to our back-office database can directly flag the infringing content for removal. Other content on our website are also monitored. For example, user-posted comments are typically screened by the text filtering system and are monitored by our screening team. Substantially all of the videos uploaded on our website are manually screened by our contract employees. All of the other content, primarily consisting of comments posted by users, are first screened by our filtering systems and the content containing prohibitive words or images is manually screened by our contract employees.

Our engineers have made modifications to the video fingerprint system to make it more compatible with China’s online video environment. We own all the intellectual property rights associated with the video fingerprint system. We also use this system and hash algorithms to reduce the number of duplicate videos and maximize the use of our video storage space.

Product Development

We have a team of experienced engineers. The supervisors in charge of our product development department graduated from prestigious universities in China and worked at well-

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established Internet and software companies in China before joining us. As of September 30, 2010, our product development staff consisted of 131 engineers and technicians. Substantially all of our engineers are based at our headquarters in Beijing. We recruit most of our engineers locally and provide various training programs to them. We compete aggressively for engineering talent to help us address challenges such as CDN maintenance and Internet bandwidth efficiency.

Our current product development efforts are focused on developing and improving, among other things, our video delivery capabilities, our website and user interfaces, our video search and discovery technology, client software to promote adoption of our platform, infrastructure technologies, advertising management systems and user data analysis technologies. In the three years ended December 31, 2007, 2008, 2009 and in the nine months ended September 30, 2010, our product development expenses were RMB15.5 million, RMB15.4 million, RMB20.9 million and RMB21.3 million (US$3.2 million), respectively.

Intellectual Property

We rely on a combination of trademark, copyright and trade secret protection laws in the PRC and other jurisdictions, as well as confidentiality procedures and contractual provisions to protect our intellectual property and our brand. “ ” is a registered trademark in the PRC. We have also applied to register additional trademarks and logos, including “iKu,” “i ,” “youku.com ,” “soku” and others with the Trademark Office of the SAIC of the PRC. We have registered our domain names, including Youku.com and Soku.com. We have 17 software registrations, including those in connection with our advertisement management, CDN and video search engine, such as Youku advertisement management system (ATM 1.0). We have obtained a computer software copyright registration certificate for “iKu”, our self-developed, proprietary software client. We own the copyright to our jointly developed video fingerprint system and its related resolution analysis.

Competition

The online video industry in China is rapidly evolving and highly competitive. Our primary competitors include companies that operate online video websites in China and traditional advertising media. We compete with these entities for both users and advertisers primarily on the basis of user base and demographics, quality and quantity of video content, brand name and user experience.

We compete with other online video providers in China, such as Tudou.com, and large Chinese Internet portals that provide online video product, such as SINA and Sohu. We also compete with traditional advertising media, such as television, radio, newspapers and magazines, and major out-of-home media, such as billboards, for advertisers’ advertising budgets. Large enterprises currently spend a relatively small percentage of their advertising budgets on online advertising as compared to the percentage they spend on traditional advertising media, but we expect the percentage spent on online advertising to increase in the future.

Employees

We had approximately 100, 223 and 325 employees as of December 31, 2007, 2008 and 2009, respectively. As of September 30, 2010, we had 507 employees, including 35 in management and administration, 131 in product development, 75 in content development and 266 in sales and marketing. In addition to these employees, we also have a team of over 300 contract employees dedicated to screening and monitoring the user-generated content uploaded to our website to ensure that no content that may be deemed to be prohibited by government rules and regulations is posted and to promptly removing any allegedly infringing content once we receive proper notification from the legitimate copyright owner. With our corporate slogan “ ” (everybody gets a share), we have

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developed a strong company culture that encourages teamwork, accountability, effectiveness and a strong commitment to providing the best experience to our users and customers. In addition, we provide stock options to our employees to align their interests more closely with those of our shareholders. We were named as one of the “20 Best Employers in China in 2009” by the Fortune China magazine.

Facilities

Our principal executive offices are located on premises comprising approximately 4,514 square meters in Beijing, China. We also have representative offices in Shanghai, Guangzhou and Chengde, and have a branch in Xi’an. We lease our premises from unrelated third parties. Each of the lessors for the leased premises either has valid title to the property or has proper authorization from the title owner to sublease the property. Below is a summary of the term of each of our leases and we plan to renew these leases when they expire:

Property	Term
Xi’an premises	November 6, 2010—November 6, 2011
Beijing premises 1	May 25, 2008—May 24, 2012
Beijing premises 2	May 10, 2010—May 24, 2014
Beijing premises 3	June 1, 2010—June 1, 2012
Shanghai premises	December 15, 2009—December 14, 2012
Chengde premises	June 1, 2010—May 31, 2011
Guangzhou premises	January 20, 2010—April 19, 2011

Our servers are hosted at Internet data centers owned by, and located along the major transmission backbones of, the leading domestic telecommunications carriers. The hosting services agreements typically have terms of approximately one year that are renewable subject to early termination. We believe that we will be able to obtain adequate facilities, principally through the leasing, to accommodate our future expansion plans.

Legal Proceedings

From time to time, we have been involved in litigation relating to copyright infringement, and other matters in the ordinary course of our business. Our video content library may contain content in which others may claim to own copyrights or image rights or which others may claim to be defamatory or objectionable. As of September 30, 2010, the aggregate claimed damages against us from ongoing litigation totaled approximately RMB4.3 million (US$0.6 million). We believe that these legal proceedings will not result in material liability to us nor will they have a material adverse effect on our business, financial condition or results of operations. Regardless of the outcome, however, any litigation can result in substantial costs and diversion of management resources and attention.

Although we have implemented standard procedures to delete video content, especially our user-generated content, that allegedly infringes on intellectual property rights of third parties, we have limited control over the nature or types of the content posted by our users. The infringement of intellectual property rights by our users may result in litigation against us and harm our business and reputation. See “Risk Factors—Risks Related to Our Business and Industry—We have been, and may continue to be, subject to liabilities for infringement of third-party intellectual property rights or other allegations based on the content available on our website or services we provide.”

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REGULATION

This section summarizes the principal current PRC laws and regulations relevant to our business and operations.

Regulations on Value-Added Telecommunications Services

On September 25, 2000, the State Council promulgated the Telecommunications Regulations, or the Telecom Regulations. The Telecom Regulations draw a distinction between “basic telecommunication services” and “value-added telecommunication services.” Internet content provision services, or ICP services, is a subcategory of value-added telecommunications businesses. Under the Telecom Regulations, commercial operators of value-added telecommunications services must first obtain an operating license from the MIIT or its provincial level counterparts.

On September 25, 2000, the State Council issued the Administrative Measures on Internet Information Services, or the Internet Measures. According to the Internet Measures, commercial ICP service operators must obtain an ICP license from the relevant government authorities before engaging in any commercial ICP operations within the PRC. In November 2000, the MIIT promulgated the Administrative Measures on Internet Electronic Messaging Services, or the BBS Measures. BBS services include electronic bulletin boards, electronic forums, message boards and chat rooms.

On December 26, 2001, the MIIT promulgated the Administrative Measures on Telecommunications Business Operating License, or the Telecom License Measures. On March 1, 2009, the MIIT issued revised Telecom License Measures, which took effect on April 10, 2009. The Telecom License Measures set forth the types of licenses required to operate value-added telecommunications services and the qualifications and procedures for obtaining such licenses. For example, an ICP operator providing value-added services in multiple provinces is required to obtain an inter-regional license, whereas an ICP operator providing the same services in one province is required to obtain a local license.

To comply with these PRC laws and regulations, 1Verge Information as our ICP operator holds a value-added telecommunications business operating license and an ICP license.

Regulations on Internet Content Services

National security considerations are an important factor in the regulation of Internet content in China. The National People’s Congress, the PRC’s national legislature, has enacted laws with respect to maintaining the security of Internet operation and Internet content. According to these laws, as well as the Internet Measures, violators may be subject to penalties, including criminal sanctions, for Internet content that:

Ÿ opposes the fundamental principles stated in the PRC constitution;

Ÿ compromises national security, divulges state secrets, subverts state power or damages national unity;

Ÿ harms the dignity or interests of the state;

Ÿ incites ethnic hatred or racial discrimination or damages inter-ethnic unity;

Ÿ undermines the PRC’s religious policy or propagates heretical teachings or feudal superstitions;

Ÿ disseminates rumors, disturbs social order or disrupts social stability;

Ÿ disseminates obscenity or pornography, encourages gambling, violence, murder or fear or incites the commission of a crime;

Ÿ insults or slanders a third party or infringes upon the lawful rights and interests of a third party; or

Ÿ is otherwise prohibited by law or administrative regulations.

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ICP operators are required to monitor their websites. They may not post or disseminate any content that falls within these prohibited categories and must remove any such content from their websites. The PRC government may shut down the websites of ICP license holders that violate any of the above-mentioned content restrictions, order them to suspend their operations, or revoke their ICP licenses.

To comply with these PRC laws and regulations, we have adopted internal procedures to monitor content displayed on our website, including a team of over 300 contract employees dedicated to screening and monitoring the content uploaded on our website and removing inappropriate or infringing content. However, due to the large amount of user uploaded content in addition to professionally produced content, we may not be able to identify all the videos or other content that may violate relevant laws and regulations. See “Risk Factors—Risks Related to Our Business and Industry—Videos and other content displayed on our website may be found objectionable by PRC regulatory authorities and may subject us to penalties and other administrative actions.”

Restrictions on Foreign Ownership in Value-Added Telecommunications Services

According to the Provisions on Administration of Foreign Invested Telecommunications Enterprises, or the FITE Provisions, promulgated by the State Council on December 11, 2001 and amended on September 10, 2008, the ultimate foreign equity ownership in a value-added telecommunications services provider must not exceed 50%. Moreover, for a foreign investor to acquire any equity interest in a value-added telecommunication business in China, it must demonstrate a good track record and experience in operating value-added telecommunications services. Foreign investors that meet these requirements must obtain approvals from the MIIT and the MOFCOM or its authorized local branches, and the relevant approval application process usually takes six to nine months. We are a Cayman Islands Company which does not have required track record or experience in operating value-added telecommunications services, and therefore we have to reorganize our current organization and ownership structure if we intend to acquire any equity interest in 1Verge Information; and 1Verge Information’s current effective permits and licenses including Internet audio/video program transmission license and Internet culture operation permit will also need to be revisited since they are not open to a foreign-invested telecommunications enterprise. We believe that it would be impracticable for us to acquire any equity interest in 1Verge Information without diverting management attention and resources. In addition, we believe that our contractual arrangements with 1Verge Information and its individual shareholders provide us with sufficient and effective control over 1Verge Information. Accordingly, we currently do not plan to acquire any equity interest in 1Verge Information.

On July 13, 2006, the MIIT issued the Notice of the MIIT on Intensifying the Administration of Foreign Investment in Value-added Telecommunications Services. This notice prohibits domestic telecommunication services providers from leasing, transferring or selling telecommunications business operating licenses to any foreign investor in any form, or providing any resources, sites or facilities to any foreign investor for their illegal operation of a telecommunications business in China. According to this notice, either the holder of a value-added telecommunication business operating license or its shareholders must legally own the domain names and trademarks used by such license holders in their provision of value-added telecommunication services. The notice further requires each license holder to have the necessary facilities, including servers, for its approved business operations and to maintain such facilities in the regions covered by its license. In addition, all value-added telecommunication service providers are required to maintain network and Internet security in accordance with the standards set forth in relevant PRC regulations. If a license holder fails to comply with the requirements in the notice and cure such non-compliance, the MIIT or its local counterparts have the discretion to take measures against such license holders, including revoking their valued-added telecommunication business operating licenses.

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To comply with these PRC regulations, we operate our website through 1Verge Information, our PRC consolidated affiliated entity. 1Verge Information is currently 80% owned by Qiong Qin and 20% owned by Dele Liu, both of whom are PRC citizens. 1Verge Information holds a value-added telecommunications business operating license and an ICP license. Due to the current uncertainties with respect to the procedural requirements of the notice, unless the relevant governmental authority expresses its intent to strictly enforce the notice with respect to trademarks, we currently do not plan to transfer any trademarks held by 1Verge Internet to 1Verge Information. See “Risk Factors—Risks Related to Doing Business in China—We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of Internet business and companies.”

Regulations on Broadcasting Audio/Video Programs through the Internet

On July 6, 2004, the SARFT promulgated the Rules for the Administration of Broadcasting of Audio/Video Programs through the Internet and Other Information Networks, or the Audio/Video Broadcasting Rules. The Audio/Video Broadcasting Rules apply to the launch, broadcasting, aggregation, transmission or download of audio/video programs via the Internet and other information networks. Anyone who wishes to engage in Internet broadcasting activities must first obtain an audio/video program transmission license, with a term of two years, issued by the SARFT and operate pursuant to the scope as provided in such license. Foreign invested enterprises are not allowed to engage in the above business.

On April 13, 2005, the State Council announced Several Decisions on Investment by Non-state-owned Companies in Culture-related Business in China. These decisions encourage and support non-state-owned companies to enter certain culture-related business in China, subject to restrictions and prohibitions for investment in audio/video broadcasting, website news and certain other businesses by non-state-owned companies. These decisions authorize the SARFT, the Ministry of Culture and the GAPP to adopt detailed implementing rules according to these decisions.

On December 20, 2007, the SARFT and the MIIT jointly issued the Rules for the Administration of Internet Audio and Video Program Services, commonly known as Circular 56, which came into effect as of January 31, 2008. Circular 56 reiterates the requirement set forth in the Audio/Video Broadcasting Rules that online audio/video service providers must obtain a license from the SARFT. Furthermore, Circular 56 requires all online audio/video service providers to be either wholly state-owned or state-controlled. According to relevant official answers to press questions published on the SARFT’s website dated February 3, 2008, officials from the SARFT and the MIIT clarified that online audio/video service providers that already had been operating lawfully prior to the issuance of Circular 56 may re-register and continue to operate without becoming state-owned or controlled, provided that such providers have not engaged in any unlawful activities. This exemption will not be granted to online audio/video service providers established after Circular 56 was issued. Such policies have been reflected in the Application Procedure for Audio/Video Program Transmission License.

To comply with these laws and regulations, 1Verge Information obtained an Internet audio/video program transmission license on July 8, 2008, which was subsequently upgraded on September 30, 2009. The upgraded license is valid for three years from September 2009 to September 2012.

On April 1, 2010, the SARFT issued the Internet Audio/Video Program Services Categories (Provisional), or the Provisional Categories, which classified Internet audio/video programs into four categories. Category I is only open to state-owned broadcast media companies operating in the television section, and the other three categories are open to privately held entities.

Under the Provisional Categories, our upgraded audio/video program transmission license may be considered as covering content that can be transmitted via the Internet and received by a computer

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in part of category II (self-broadcast programs service, including films, television dramas, entertainment and specialized audio/video programs), and part of category III (Internet user uploaded audio/video programs service, including audio/video programs uploaded by users, but excluding news). However, at this stage it is unclear as to how the categorization system under the newly adopted Provisional Categories will be enforced, how will it evolve, or to what extent it will affect the audio/video program transmission licenses that have been obtained before the Provisional Categories became effective. Prior to the promulgation of the Provisional Categories, we had conducted a small amount of “re-broadcasting” of radio and television channel programs, which was common practice in the Internet television industry. Such services may be considered, in light of the Provisional Categories, not fully covered by our latest effective audio/video program transmission license. We have made oral inquiries to SARFT and were informed that our current “re-broadcasting” operation is not in violation with the applicable laws and regulations. 1Verge Information has also applied to upgrade its Internet audio/video program transmission license to cover category IV content (re-broadcasting of radio and television channel programs). In addition, “Soku” is a search engine for audio/video programs and is still in the beta testing phase and has not been officially launched. 1Verge Information is applying to upgrade its Internet audio/video program transmission license to cover the remaining category III content (aggregation of the online audio/video content, i.e., search functionality for audio/video programs). 1Verge Information is also applying for qualifications relating to the use of its services by mobile devices. Currently we rely on our partnership with China’s major wireless Internet providers to provide pay-per-view premium content on mobile devices, in which case our wireless Internet provider partner holds the required mobile devices services license. Our application for mobile devices services qualification, if approved, would enable us to provide such services more independently in the future. We expect to obtain the upgraded license within one year and the cost associated with this application is procedural fee and not material.

Regulations on Internet News Publication

Publishing and disseminating news through the Internet are highly regulated in the PRC. On November 7, 2000, the SCIO and the MIIT jointly promulgated the Provisional Measures for Administrating Internet Websites Carrying on the News Publication Business, or Internet News Measures. These measures require an ICP operator (other than a government authorized news unit) to obtain the approval from SCIO to publish news on its website or disseminate news through the Internet. Furthermore, any disseminated news is required to be obtained from government-approved sources based on contracts between the ICP operator and these sources. The copies of such contracts must be filed with relevant government authorities.

On September 25, 2005, the SCIO and the MIIT jointly issued the Provisions on the Administration of Internet News Information Services, requiring Internet news information service organizations to provide services as approved by the SCIO, subject to annual inspection under the new provisions. These Provisions also provide that no Internet news information service organizations may take the form of a foreign invested enterprise, whether jointly or wholly owned by the foreign investment, and no cooperation between Internet news information service organizations and foreign invested enterprise is allowed before the SCIO completes the security evaluation.

Currently we operate a current events channel on our website, which includes audio/video contents relating to current topics and social events. We have made oral inquiries with the SCIO and were orally informed that such operations do not violate the regulations on Internet news publication. 1Verge Information is in the process of applying for the Internet news publication permits. While the regulations on Internet news publication provide a 60-day period for application review, in practice the timing and issuance of final approval are at the sole discretion of the relevant government authority, which we are not in a position to comment or predict. The cost associated with this application is procedural fee and not material.

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Regulations for Internet Publication

The GAPP is responsible for nationwide supervision and administration of publishing activities in China. On June 27, 2002, the GAPP and the MIIT jointly promulgated the Internet Publication Tentative Administrative Measures, or the Internet Publication Measures, which took effect on August 1, 2002. Pursuant to the Internet Publication Measures, any entity engaged in Internet publishing activities must obtain the Internet Publication License from the GAPP before conducting any Internet publication activities.

The term “Internet publication” is defined as Internet transmission activity by which Internet information service providers publish on the Internet or transmit to end-users via the Internet works that they or others have created, after selection and editing, for browsing, reading, use or downloading by the general public. The works in question primarily include (i) content that has already been published formally, such as books, newspapers, periodicals, audio/video products and electronic publications, or that has been made public via other media; and (ii) edited works of literature and art or works concerning natural science, social science, engineering or other topics.

However, the Internet Publication Measures were promulgated in June 2002, which is approximately three years prior to the establishment of China’s first group of online audio/video websites. At the time of promulgation, these Measures were intended to regulate the traditional audio/video products and online gaming and did not consider the issues directly relevant to online audio/video business. Furthermore, the definition of “Internet publication” under these Measures is very broad and the GAPP has not provided any implementation rule or official interpretation as to the applicability of the Internet Publication Measures to a website such as Youku.com that exclusively distributes audio/ video content. To our knowledge, in practice no website exclusively providing online audio or video content has obtained an Internet publication license in China. 1Verge Information may apply for an Internet Publication License once this issue is clarified and confirmed officially.

Regulations on Internet Medical and Health Information Services

On January 3, 2001, the Ministry of Health promulgated the Measures on the Administration of Internet Medical Care Information Services, or the Internet Medical Information Measures. The Internet Medical Information Measures require an ICP operator to obtain the approval from the Ministry of Health or its provincial counterpart for the provision of Internet medical care information services.

On May 1, 2009, the Ministry of Health promulgated the revised Internet Medical Information Measures, which became effective on July 1, 2009. The revised Internet Medical Information Measures require an ICP operator engaging in providing medical and health information to Internet users (which, among others, includes the provision of such information through the health channel on the operator’s website) to obtain a permit from the relevant provincial counterpart of the Ministry of Health. 1Verge Information obtained an approval from Beijing Municipal Health Bureau on February 25, 2009 for the provision of Internet medical care information services which remains valid under the revised measures.

Regulations on Advertisements

The PRC government regulates advertising, including online advertising, principally through the SAIC, although there is no PRC law or regulation at the national level that specifically regulates online advertising business. Prior to November 30, 2004, in order to conduct any advertisement business, an enterprise was required to hold an operating license for advertisement in addition to a relevant business license. On November 30, 2004, the SAIC issued the Administrative Rules for Advertising

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Operation Licenses, effective as of January 1, 2005, granting a general exemption to this requirement for most enterprises (other than radio stations, television stations, newspapers and magazines, non-corporate entities and entities specified in other regulations). Because 1Verge Information and Jiaheyi qualify for the exemption noted above, they are not required to hold an advertising operation license.

Under the Rules for Administration of Foreign Invested Advertising Enterprises, which were jointly promulgated by the SAIC and the MOFCOM on March 2, 2004 and amended on August 22, 2008, certain foreign investors are permitted to hold direct equity interests in PRC advertising companies. A foreign investor in a Chinese advertising company is required to have previously had direct advertising operations as its main business outside of China for two years if the Chinese advertising company is a joint venture, or three years if the Chinese advertising company is a wholly owned foreign enterprise. In practice, the foreign investor is deemed compliant of the “main business” requirement if it derives more than 50% of its revenues from advertising business within the past two or three years, as applicable. Since we have not been involved in the advertising industry outside of China for the required number of years, we are not permitted to hold direct equity interests in PRC companies engaging in the advertising business. Therefore, we conduct our advertising business through our consolidated affiliated entities in China, 1Verge Information and Jiaheyi. In April 2010, we acquired Jet Brilliant, a Hong Kong company which derived more than 50% of its revenues during the past three years of operation from its advertising business, and therefore satisfied the three years’ direct advertising operation requirement, and received the approval from the SAIC to establish Jet Brilliant Beijing on May 19, 2009 as its wholly owned advertisement enterprise. Going forward, we will conduct our advertising agency business through the newly acquired Jet Brilliant Beijing. Jiaheyi is scheduled to be liquidated in 2011.

Advertisers, advertising operators and advertising distributors are required by PRC advertising laws and regulations to ensure that the contents of the advertisements they produce or distribute are true and in full compliance with applicable laws and regulations. In addition, where a special government review is required for certain categories of advertisements before publishing, the advertisers, advertising operators and advertising distributors are obligated to confirm that such review has been duly performed and that the relevant approval has been obtained. Violation of these regulations may result in penalties, including fines, confiscation of advertising income, orders to cease dissemination of the advertisements and orders to publish an advertisement correcting the misleading information. In circumstances involving serious violations, the SAIC or its local branches may order the violator to terminate its advertising operation or even revoke its business license. Furthermore, advertisers, advertising operators or advertising distributors may be subject to civil liabilities if they infringe on the legal rights and interests of third parties. To comply with these laws and regulations, we include clauses in all of our advertising contracts requiring that all advertising content provided by advertisers must comply with relevant laws and regulations. Under PRC law, the advertising agencies are liable for all damages to us caused by their breach of such representations. Prior to website posting, our account execution personnel are required to review all advertising materials, including video commercials, flashes and pictures to ensure there is no racial, violent, pornographic or any other improper content, and will request the advertiser to provide government approval if the advertisement is subject to special government review.

On July 8, 2004, the State Food and Drug Administration promulgated the Administration Measures on Internet Drug Information Services, which require that Internet operators providing drug information services shall be approved by the competent food and drug administration, and drug advertisements shall be examined and approved by the competent food and drug administration as well. 1Verge Information obtained a permit from the Beijing Drug Administration on October 25, 2010. Before obtaining such permit, there were a small number of advertisements for non-prescription drugs shown on our website, which may not have been in compliance with the Administration Measures on

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Internet Drug Information Services and may subject us to administrative warnings, termination of any Internet drug advertisements on our website and other penalties which are not clearly defined in the measures, although we have not been sanctioned by the relevant governmental authority in the past. We are now qualified to post approved non-prescription drug advertisements on our website pursuant to the drug information permit, and we believe the risk of any penalties imposed on our past conduct is low. This permit is valid for five years from October 25, 2010 to October 24, 2015.

Regulations on Internet Culture Activities

On May 10, 2003, the Ministry of Culture promulgated the Internet Culture Administration Tentative Measures, or the Internet Culture Measures, which was revised on July 1, 2004. The Internet Culture Measures require ICP operators engaging in “Internet culture activities” to obtain a permit from the Ministry of Culture. The term “Internet culture activities” includes, among other things, online dissemination of Internet cultural products (such as audio-video products, gaming products, performances of plays or programs, works of art and cartoons) and the production, reproduction, importation, sale (wholesale or retail), leasing and broadcasting of Internet cultural products. We have hosted certain audio/video programs on the website www.youku.com operated by 1Verge Information. 1Verge Information was granted an Internet culture business permit in October 2008.

On November 20, 2006, the Ministry of Culture issued Several Suggestions of the Ministry of Culture on the Development and Administration of the Internet Music, or the Suggestions, which became effective on November 20, 2006. The Suggestions, among other things, reiterate the requirement for the Internet service provider to obtain an Internet culture business permit to carry on any business relating to Internet music products. In addition, foreign investors are prohibited from operating Internet culture businesses. However, the laws and regulations on Internet music products are still evolving, and there have not been any provisions stipulating whether or how music video will be regulated by the Suggestions.

On August 18, 2009, the Ministry of Culture promulgated the Notice on Strengthening and Improving the Content Review of Online Music. According to this notice, only “Internet culture operating entities” approved by the Ministry of Culture may engage in the production, release, dissemination (including providing direct links to music products) and importation of online music products. The content of online music shall be reviews by or filed with the Ministry of Culture. Internet culture operating entities should establish a strict self-monitoring system of online music content and set up a special department in charge of such monitoring.

To comply with these laws and regulations, our content examination team reviews the music videos on our website as well as certain other content.

Regulations on Producing Audio/Video Programs

On July 19, 2004, the SARFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, effective as of August 20, 2004. These Measures provide that anyone who wishes to produce or operate radio or television programs must first obtain an operating permit. Applicants for this permit must meet several criteria, including having a minimum registered capital of RMB3 million. 1Verge Information was granted a permit for radio and television program production and operation in July 2008, with a permitted scope encompassing the production of animated programs, television entertainment and special features.

Regulations on Software Products

On October 27, 2000, the MIIT issued the Administrative Measures on Software Products, or the Software Measures, to strengthen the regulation of software products and to encourage the development of the PRC software industry. On March 1, 2009, the MIIT issued amended Software Measures, which became effective on April 10, 2009. The Software Measures provide a registration and filing system with respect to software products made in or imported into China. These software

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products may be registered with the competent local authorities in charge of software industry administration. Registered software products may enjoy preferential treatment status granted by relevant software industry regulations. Software products can be registered for five years, and the registration is renewable upon expiration.

In order to further implement the Computer Software Protection Regulations promulgated by the State Council on December 20, 2001, the National Copyright Administration of the PRC issued the Computer Software Copyright Registration Procedures on February 20, 2002, which apply to software copyright registration, license contract registration and transfer contract registration. 1Verge Information and 1Verge Internet have obtained and maintain 10 software copyright registrations.

Regulations on Intellectual Property Rights

China has adopted legislation governing intellectual property rights, including trademarks, patents and copyrights. China is a signatory to the main international conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon its accession to the World Trade Organization in December 2001.

Patent.    The National People’s Congress adopted the Patent Law in 1984, and amended it in 1992, 2000 and 2008. The purpose of the Patent Law is to protect lawful interests of patent holders, encourage invention, foster applications of invention, enhance innovative capabilities and promote the development of science and technology. To be patentable, invention or utility models must meet three conditions: novelty, inventiveness and practical applicability. Patents cannot be granted for scientific discoveries, rules and methods for intellectual activities, methods used to diagnose or treat diseases, animal and plant breeds, substances obtained by means of nuclear transformation or a design which has major marking effect on the patterns or colors of graphic print products or a combination of both patterns and colors. The Patent Office under the State Intellectual Property Office is responsible for receiving, examining and approving patent applications. A patent is valid for a term of twenty years in the case of an invention and a term of ten years in the case of utility models and designs. A third-party user must obtain consent or a proper license from the patent owner to use the patent. Otherwise, the use constitutes an infringement of patent rights.

Copyright.    The National People’s Congress adopted the Copyright Law in 1990 and amended it in 2001 and 2010, respectively. The amended Copyright Law extends copyright protection to Internet activities, products disseminated over the Internet and software products. In addition, there is a voluntary registration system administered by the China Copyright Protection Center. The amended Copyright Law also requires registration of a copyright pledge.

To address copyright issues relating to the Internet, the PRC Supreme People’s Court on December 19, 2000 adopted the Interpretations on Some Issues Concerning Applicable Laws for Trial of Disputes over Internet Copyright, or the Interpretations, which were subsequently amended on January 2, 2004 and November 22, 2006. The Interpretations establish joint liability for ICP operators if they participate in, assist in or incite infringing activities or fail to remove infringing content from their websites after knowing the infringement of copyrights conducted by Internet users through the Internet or receiving notice from the rights holder. In addition, ICP operators shall be liable for knowingly uploading, disseminating or providing any measures, facilities or materials intended to bypass circumvention technologies designed to protect copyrights. Upon request, the ICP operators must provide the rights holder with registration information of the alleged violator, provided that such rights holder has produced relevant identification, copyright certificate and evidence of infringement. A court shall not uphold the alleged infringer’s claim against an ICP operator for breach of contract if the ICP operator removes the alleged infringing content after receiving the rights holder’s notice accompanied with proper evidence.

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To address the problem of copyright infringement related to the content posted or transmitted over the Internet, the National Copyright Administration and the MIIT jointly promulgated the Measures for Administrative Protection of Copyright Related to Internet on April 29, 2005. This measure became effective on May 30, 2005.

This measure applies to situations where an ICP operator (i) allows another person to post or store any works, recordings, audio or video programs on the websites operated by such ICP operator, or (ii) provides links to, or search results for, the works, recordings, audio or video programs posted or transmitted by such person, without editing, revising or selecting the content of such material. Upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedial actions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedial actions after receipt of a notice of infringement harming public interest, the ICP operator could be subject to administrative penalties, including: cessation of infringement activities; confiscation by the authorities of all income derived from the infringement activities; and payment of a fine of up to three times the unlawful income or, in cases where the amount of unlawful income cannot be determined, a fine of up to RMB100,000. An ICP operator is also required to retain all infringement notices for a minimum of six months and to record the content, display time and IP addresses or the domain names related to the infringement for a minimum of 60 days. Failure to comply with this requirement could result in an administrative warning and a fine of up to RMB30,000.

On May 18, 2006, the State Council promulgated the Protection of the Right of Communication through Information Networks, which became effective on July 1, 2006. Under this regulation, with respect to any information storage space, search or link services provided by an Internet service provider, if the legitimate right owner believes that the works, performance or sound or video recordings pertaining to that service infringe his or her rights of communication, the right owner may give the Internet service provider a written notice containing the relevant information along with preliminary materials proving that an infringement has occurred, and requesting that the Internet service provider delete, or disconnect the links to, such works or recordings. The right owner will be responsible for the truthfulness of the content of the notice.

Upon receipt of the notice, the Internet service provider must delete or disconnect the links to the infringing content immediately and forward the notice to the user that provided the infringing works or recordings. If the written notice cannot be sent to the user due to the unknown IP address, the contents of the notice shall be publicized via information networks. If the user believes that the subject works or recordings have not infringed others’ rights, the user may submit to the Internet service provider a written explanation with preliminary materials proving non-infringement, and a request for the restoration of the deleted works or recordings. The Internet service provider should then immediately restore the deleted or disconnected content and forward the user’s written statement to the right owner.

An Internet service provider that provides information storage space to users through which users may provide works, performance or sound or video recordings to the public will be exempted from liability for compensation to right owners where the following conditions apply (i) the Internet service provider has clearly indicated that the information storage space is provided to users, and published the name, contact person and IP address of the network service provider; (ii) it has not altered the works or recordings provided by users; (iii) it did not know, or could not reasonably have been expected to know, that the content provided by users infringed other’s rights; (iv) it has not received any direct financial gain from the users’ provision of the content; and (v) it deletes the allegedly infringing content upon receiving written notice from the rights owners. An Internet service provider that provides users with search or link services will be exempted from liability for compensation to right owner if the Internet service provider promptly disconnects the link to the infringing content after receiving the right owner’s notice. This exemption is not valid however if the Internet service provider knew or should know that the linked content infringed another’s rights; in that scenario, it will be jointly liable with the user who provided the content.

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Since 2005, the National Copyright Administration, or the NCA, together with certain other PRC governmental authorities, have jointly launched annual campaigns specifically aimed to crack down on Internet copyright infringement and piracy in China, which normally last for three to four months every year. According to the Notice of 2010 Campaign to Crack Down on Internet Infringement and Piracy promulgated by the NCA, the Ministry of Public Security and MIIT on July 19, 2010, one of the main targets, among others, of the 2010 campaign is Internet audio and video programs. Since the 2010 campaign commenced in late July, the local branches of NCA have been focusing on popular movies and television series, newly published books, online games and animation, music and software and illegal uploading or transmission of a third party’s works without proper license or permission, sales of pirated audio/video and software through e-commerce platforms, providing search links, information storage, web hosting or Internet access services for third parties engaging in copyright infringement or piracy and the infringement by use of mobile media. In serious cases, the operating permits of the websites engaging in illegal activities may be revoked, and such websites may be ordered to shut down.

We have adopted measures to mitigate copyright infringement risks. For example, our policy is to remove links to web pages if we know these web pages contain materials that infringe third-party rights or if we are notified by the legitimate copyright holder of the infringement with proper evidence.

On December 26, 2009, the Standing Committee of the National People’s Congress adopted the Torts Liability Law, which became effective on July 1, 2010. Under this new law, both Internet users and Internet service providers may be liable for the wrongful acts of users who infringe the lawful rights of other parties. If an Internet user utilizes Internet services to commit a tortious act, the party whose rights are infringed may request the Internet service provider to take measures, such as removing or blocking the content, or disabling the links thereto, to prevent or stop the infringement. If the Internet service provider does not take necessary measures after receiving such notice, it shall be jointly liable for any further damages suffered by the rights holder. Furthermore, if an Internet service provider fails to take necessary measures when it knows that an Internet user utilizes its Internet services to infringe the lawful rights and interests of other parties, it shall be jointly liable with the Internet user for damages resulting from the infringement.

Trademark.    The PRC Trademark Law, adopted in 1982 and revised respectively in 1993 and 2001, protects registered trademarks. The Trademark Office under the SAIC handles trademark registrations and grants a term of ten years to registered trademarks. Trademark license agreements must be filed with the Trademark Office for record. “ ” is a registered trademark in China. We have also applied to register additional trademarks and logos, including “iKu,” “i ,” “youku.com ,” “soku” and others with the Trademark Office.

Domain Name.    In September 2002, the CNNIC issued the Implementing Rules for Domain Name Registration setting forth detailed rules for registration of domain names. On November 5, 2004, the MIIT promulgated the Measures for Administration of Domain Names for the Chinese Internet, or Domain Name Measures. The Domain Name Measures regulate the registration of domain names, such as the first tier domain name “.cn.” In February 2006, CNNIC issued the Measures on Domain Name Disputes Resolution and its implementing rules, pursuant to which CNNIC can authorize a domain name dispute resolution institution to decide disputes. We have registered www.youku.com and certain other domain names.

Regulations on Information Security

The National People’s Congress has enacted legislation that prohibits use of the Internet that breaches the public security, disseminates socially destabilizing content or leaks state secrets. Breach of public security includes breach of national security and infringement on legal rights and interests of the state, society or citizens. Socially destabilizing content includes any content that incites defiance or violations of PRC laws or regulations or subversion of the PRC government or its political system, spreads socially disruptive rumors or involves cult activities, superstition, obscenities, pornography,

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gambling or violence. State secrets are defined broadly to include information concerning PRC national defense, state affairs and other matters as determined by the PRC authorities.

According to other relevant regulations, ICP operators must complete mandatory security filing procedures and regularly update information security and censorship systems for their websites with local public security authorities, and must also report any public dissemination of prohibited content.

In addition, the State Secrecy Bureau has issued provisions authorizing the blocking of access to any website it deems to be leaking state secrets or failing to comply with the relevant legislation regarding the protection of state secrets during online information distribution.

On December 13, 2005, the Ministry of Public Security promulgated Provisions on Technological Measures for Internet Security Protection, or Internet Protection Measures. The Internet Protection Measures require all ICP operators to keep records of certain information about its users (including user registration information, log-in and log-out time, IP address, content and time of posts by users) for at least 60 days and submit the above information as required by laws and regulations.

As 1Verge Information is an ICP operator, it is subject to the laws and regulations relating to information security. To comply with these laws and regulations, it has completed the mandatory security filing procedures with the local public security authorities, regularly updates its information security and content-filtering systems with newly issued content restrictions, and maintains records of users’ information as required by the relevant laws and regulations. It has also taken measures to delete or remove links to the content that to its knowledge contains information violating PRC laws and regulations. Substantially all of the videos uploaded on our website are manually screened by more than 300 contract employees who are dedicated to screening and monitoring the content uploaded on our website and removing prohibited content. All of the other content, primarily consisting of comments posted by users, is first screened by our filtering systems and content containing prohibitive words or images is manually screened by our contract employees. We believe these measures make our website duly monitored and, therefore, no prohibited content under PRC information security laws and regulations should have been publicly disseminated through our website in the past. However, due to the significant amount of content uploaded on our website by our users on a daily basis, if any prohibited content is publicly disseminated in the future, we will report to the relevant governmental authority. We believe these measures are generally in compliance with the relevant laws and regulations.

Regulations on Internet Privacy

The PRC Constitution states that PRC law protects the freedom and privacy of communications of citizens and prohibits infringement of such rights. In recent years, PRC government authorities have enacted legislation on Internet use to protect personal information from any unauthorized disclosure. The Internet Measures prohibit an ICP operator from insulting or slandering a third party or infringing the lawful rights and interests of a third party. Pursuant to the BBS Measures, ICP operators that provide electronic messaging services must keep users’ personal information confidential and must not disclose such personal information to any third party without the users’ consent or unless required by law. The regulations further authorize the relevant telecommunications authorities to order ICP operators to rectify unauthorized disclosure. ICP operators are subject to legal liability if the unauthorized disclosure results in damages or losses to users. The PRC government, however, has the power and authority to order ICP operators to turn over personal information if an Internet user posts any prohibited content or engages in illegal activities on the Internet.

To comply with these laws and regulations, we have established information security systems to protect users’ privacy and have filed them with the MIIT or its local branch as required. However, due to the significant amount of content uploaded by users on a daily basis, we cannot ensure that no content uploaded by our users will infringe the privacy rights of any third party without receiving notice from such third party. See “Risk Factors—Risks Related to Our Business and Industry—We have been, and may continue to be, subject to liabilities for infringement of third-party intellectual property rights or other allegations based on the content available on our website or services we provide.”

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Regulations on Registration of Branch Companies

On October 27, 2005, the Standing Committee of the National People’s Congress promulgated the amended PRC Company Law. It provides that a company may establish branch companies, which are entities without the status of a legal person. A branch company must register its establishment at the applicable government agency and obtain a business license. On April 24, 2006, the SAIC, the MOFCOM, the General Administration of Customs and the SAFE jointly issued the Notice on the Issuance of the Implementing Opinions Concerning Several Issues on the Application of Laws Governing the Administration of the Approval and Registration of Foreign Invested Companies, which provides that while representative offices of a foreign invested company that conduct operational business activities shall be registered as the company’s branch companies, those without such activities are no longer required to be registered. There has not been any specific stipulation in PRC laws or regulations regarding the definition of “operational business activities.”

We have established a branch company in Xi’an and three representative offices in Shanghai, Guangzhou and Chengde, respectively. We plan to register these representative offices at the competent local branches of the SAIC and are currently contemplating which subsidiary these entities should be affiliated with.

Regulations on Tax

PRC Enterprise Income Tax

The PRC enterprise income tax is calculated based on the taxable income determined under the applicable EIT Law and its implementation rules. On March 16, 2007, the National People’s Congress of China enacted the New EIT Law, which became effective on January 1, 2008. On December 6, 2007, the State Council promulgated the implementation rules to the New EIT Law, which also became effective on January 1, 2008. On December 26, 2007, the State Council issued the Notice on Implementation of Enterprise Income Tax Transition Preferential Policy under the PRC Enterprise Income Tax Law, or the Transition Preferential Policy Circular, which became effective simultaneously with the New EIT Law. The New EIT Law imposes a uniform enterprise income tax rate of 25% on all resident enterprises in China, including foreign-invested enterprises and domestic enterprises, unless they qualify for certain exceptions, and terminates most of the tax exemptions, reductions and preferential treatments available under the Old EIT Law and regulations. Under the New EIT Law and the Transition Preferential Policy Circular, qualified enterprises established before March 16, 2007 that already enjoyed preferential tax treatments will continue to enjoy them (i) in the case of preferential tax rates, for a maximum of five years starting from January 1, 2008, and during the five-year period, the tax rate will gradually increase from their current preferential tax rate to 25%, or (ii) in the case of preferential tax exemption or reduction for a specified term, until the expiration of such term. For enterprises that are not profitable enough to enjoy the preferential tax exemption or reduction referred to in (ii) above, the preferential duration shall commence from 2008.

Prior to the effectiveness of the New EIT Law on January 1, 2008, domestic companies were generally subject to an enterprise income tax at a statutory rate of 33%. However, our PRC consolidated affiliated entity, 1Verge Information, satisfied certain conditions enjoyed preferential tax treatment.

The New EIT Law and its implementation rules permit certain “high and new technology enterprises strongly supported by the state” that hold independent ownership of core intellectual property and simultaneously meet a list of other criteria, financial or non-financial, as stipulated in the implementation rules and other regulations, to enjoy a reduced 15% enterprise income tax rate subject to certain new qualification criteria. The State Administration of Taxation, the Ministry of Science and Technology and the Ministry of Finance jointly issued the Administrative Rules for the Certification of

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High and New Technology Enterprises delineating the specific criteria and procedures for the “high and new technology enterprises” certification on April 14, 2008.

Our consolidated affiliated entity 1Verge Information was recognized by the provincial level Science and Technology Commission, Finance Bureau, and State and Local Tax Bureaus as “high and new technology enterprise” on December 14, 2009, which will be valid for 3 years. Therefore, 1Verge Information is entitled to the preferential enterprise income tax rate of 15%. However, we cannot assure you that 1Verge Information can continue to be recognized as “high and new technology enterprise” or renew this qualification when the term expires, and thus continue to be entitled to the preferential enterprise income tax rate of 15% or any other preferential enterprise income tax treatment.

Uncertainties exist with respect to how the New EIT Law applies to our tax residency status. Under the New EIT Law, an enterprise established outside of China with “de facto management body” within China is considered a “resident enterprise,” which means that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes, although the dividends paid to one resident enterprise from another may qualify as “tax-exempt income.” Though the implementation rules of the New EIT Law define “de facto management body” as “establishments that carry out substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc. of an enterprise,” the only constructive guidance for this definition currently available is set forth in the SAT Circular 82 issued by the PRC State Administration of Taxation, which provides guidance on the determination of the tax residency status of Chinese-controlled offshore incorporated enterprises, defined as an enterprise that is incorporated under the laws of a foreign country or territory and that has a PRC enterprise or enterprise group as its primary controlling shareholder. Although we do not have a PRC enterprise or enterprise group as its primary controlling shareholder and is therefore not a Chinese-controlled offshore incorporated enterprise within the meaning of the SAT Circular 82, in the absence of guidance specifically applicable to us, we has applied the guidance set forth in the SAT Circular 82 to evaluate the tax residency status of its legal entities organized outside the PRC.

According to the SAT Circular 82, a Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following conditions set forth in the SAT Circular 82 are met:

Ÿ the primary location of the day-to-day operational management is in the PRC;

Ÿ decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC;

Ÿ the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions are located or maintained in the PRC; and

Ÿ 50% or more of voting board members or senior executives habitually reside in the PRC.

We do not believe that either Youku.com Inc. or its Hong Kong subsidiary, Jet Brilliant, meets all of the conditions above. Each of Youku.com Inc. and Jet Brilliant is a company incorporated outside the PRC. As holding companies, these two entities’ key assets and records, including the resolutions of their respective board of directors and the resolutions of their respective shareholders, are located and maintained outside the PRC. In addition, we are not aware of any offshore holding companies with a similar corporate structure as ours ever having been deemed a PRC “resident enterprise” by the PRC tax authorities. Therefore, we believe that neither Youku.com Inc. nor Jet Brilliant should be treated as a “resident enterprise” for PRC tax purposes if the criteria for “de facto management body” as set forth in the SAT Circular 82 were deemed applicable to us. However, as the tax residency status of an

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enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body” as applicable to our offshore entities, we will continue to monitor our tax status. See “Risk Factors—Risks Related to Doing Business in China—Our global income and the dividends that we may receive from our PRC subsidiaries may be subject to PRC taxes under the PRC Enterprise Income Tax Law, which would have a material adverse effect on our results of operations.”

Although we believe we are not a PRC resident enterprise for enterprise income tax purposes, substantial uncertainty exists. In the event that our company or our Hong Kong subsidiary is considered to be a PRC resident enterprise, (1) our company or our Hong Kong subsidiary, as the case may be, would be subject to the PRC enterprise income tax at the rate of 25% on worldwide income; and (2) dividend income that our company or our Hong Kong subsidiary, as the case may be, receives from our PRC subsidiaries, however, would be exempt from the PRC withholding tax since such income is exempted under the New EIT Law for PRC resident enterprise recipients. See “Risk Factors—Risks Related to Doing Business in China—Our global income and the dividends that we may receive from our PRC subsidiaries may be subject to PRC taxes under the PRC Enterprise Income Tax Law, which would have a material and adverse effect on our results of operations.”

Under SAT Circular 698, if a non-resident enterprise transfers the equity interests of a PRC resident enterprise indirectly by disposition of the equity interests of an overseas holding company, or Indirect Transfer, and such overseas holding company is located in a tax jurisdiction that: (i) has an effective tax rate less than 12.5%, or (ii) does not tax foreign income of its residents, the non-resident enterprise, being the transferor, shall report to the PRC competent tax authority of the PRC resident enterprise this Indirect Transfer. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding, or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC withholding tax at a rate of up to 10%. SAT Circular 698 also provides that, where a non-PRC resident enterprise transfers its equity interests in a PRC resident enterprise to its related parties at a price lower than the fair market value, the relevant tax authority has the power to make a reasonable adjustment to the taxable income of the transaction. SAT Circular 698 is retroactively effective on January 1, 2008. There is uncertainty as to the application of SAT Circular 698. If SAT Circular 698 was determined by the tax authorities to be applicable to us and our non-resident investors, we and our non-resident investors may be required to expend valuable resources to comply with this circular or to establish that we or our non-resident investors should not be taxed under SAT Circular 698, which may adversely affect us or our non-resident investors. See “Risk Factors—Risks Related to Doing Business in China—We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.”

PRC Business Tax

Pursuant to applicable PRC tax regulations, any entity or individual conducting business in the service industry is generally required to pay a business tax at the rate of 5% on the revenues generated from providing such services. However, if the services provided are related to technology development and transfer, such business tax may be exempted subject to the approval of relevant tax authorities.

Cultural Development Fee

According to applicable PRC tax regulations or rules, advertising service providers are generally required to pay a cultural development fee at the rate of 3% on the revenues (i) which are generated from providing advertising services and (ii) which are also subject to the business tax.

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Dividends Withholding Tax

Under the Old EIT Law effective prior to January 1, 2008, dividends paid to foreign investors by foreign-invested enterprises, such as dividends paid to us by 1Verge Internet and Jet Brilliant Beijing, would be exempt from PRC withholding tax. We are a Cayman Islands holding company and substantially all of our income may come from dividends we receive from our subsidiaries located in the PRC and Hong Kong. Pursuant to the New EIT Law and its implementation rules, dividends generated after January 1, 2008 and distributed to us by 1Verge Internet, which is our PRC subsidiary directly held by our company, are subject to withholding tax a rate of 10%. Dividends generated after January 1, 2008 and distributed to our Hong Kong subsidiary Jet Brilliant by Jet Brilliant Beijing, which is our PRC subsidiary directly held by our Hong Kong subsidiary, are subject to withholding tax at a rate of 5%, provided that our Hong Kong subsidiary is determined by the relevant PRC tax authorities to be a “non-resident enterprise” under the New EIT Law and holds at least 25% of the equity interest of Jet Brilliant Beijing. Jet Brilliant has not obtained the approval for a withholding tax rate of 5% from the local tax authority and does not plan to obtain such approval in the near future, because Jet Brilliant Beijing has paid nil dividends from April 27, 2010 to September 30, 2010 and does not plan to pay dividends in the future as it may continue to incur losses. However, the SAT promulgated Notice on How to Understand and Determine the Beneficial Owners in Tax Agreement on October 27, 2009, or SAT Circular 601, which provides guidance for determining whether a resident of a contracting state is the “beneficial owner” of an item of income under China’s tax treaties and tax arrangements. According to SAT Circular 601, a beneficial owner generally must be engaged in substantive business activities. An agent or conduit company will not be regarded as a beneficial owner and, therefore, will not qualify for treaty benefits. The conduit company normally refers to a company that is set up for the purpose of avoiding or reducing taxes or transferring or accumulating profits. In addition, as described above, our company or our Hong Kong subsidiary may be considered a PRC resident enterprise for PRC enterprise income tax purposes, in which case dividends received by it, as the case may be, from the relevant PRC subsidiary would be exempt from the PRC withholding tax because such income is exempt under the New EIT Law for a PRC resident enterprise recipient.

As there remains uncertainty regarding the interpretation and implementation of the New EIT Law and its implementation rules, it is uncertain whether, if we are deemed a PRC resident enterprise, any dividends to be distributed by us to our non-PRC shareholders and ADS holders would be subject to any PRC withholding tax. See “Risk Factors—Risks Related to Doing Business in China—Our global income and the dividends that we may receive from our PRC subsidiaries may be subject to PRC taxes under the PRC Enterprise Income Tax Law, which would materially and adversely affect our results of operations.”

Regulations on Foreign Exchange

Foreign exchange activities in China are primarily governed by the following regulations:

Ÿ Foreign Currency Administration Rules (2008), or the Exchange Rules; and

Ÿ Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules.

Under the Exchange Rules, if documents certifying the purposes of the conversion of RMB into foreign currency are submitted to the relevant foreign exchange conversion bank, the RMB will be convertible for current account items, including the distribution of dividends, interest and royalties payments, and trade and service-related foreign exchange transactions. Conversion of RMB for capital account items, such as direct investment, loan, securities investment and repatriation of investment, however, is subject to the approval of the SAFE or its local counterpart.

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Under the Administration Rules, foreign-invested enterprises may only buy, sell and/or remit foreign currencies at banks authorized to conduct foreign exchange business after providing valid commercial documents and, in the case of capital account item transactions, obtaining approval from the SAFE or its local counterpart. Capital investments by PRC entities outside of China, after obtaining the required approvals of the relevant approval authorities, such as the MOFCOM and the National Development and Reform Commission or their local counterparts, are also required to register with the SAFE or its local counterpart.

In utilizing the proceeds we expect to receive from this offering in the manner described in “Use of Proceeds,” as an offshore holding company with PRC subsidiaries, we may (i) make additional capital contributions to our PRC subsidiaries, (ii) establish new PRC subsidiaries and make capital contributions to these new PRC subsidiaries, (iii) make loans to our PRC subsidiaries or consolidated affiliated entities, or (iv) acquire offshore entities with business operations in China in offshore transactions. However, most of these uses are subject to PRC regulations and approvals. For example:

Ÿ capital contributions to our PRC subsidiaries, whether existing or newly established ones, must be approved by the PRC Ministry of Commerce or its local counterparts;

Ÿ loans by us to our PRC subsidiaries, each of which is a foreign-invested enterprise, to finance their activities cannot exceed statutory limits and must be registered with SAFE or its local branches; and

Ÿ loans by us to our consolidated affiliated entities, which are domestic PRC entities, must be approved by the National Development and Reform Commission and must also be registered with SAFE or its local branches.

On August 29, 2008, the SAFE issued the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or Circular No. 142. Pursuant to Circular No. 142, the Renminbi capital from the settlement of foreign currency capital of a foreign-invested enterprise must be used within the business scope as approved by the applicable government authority and cannot be used for domestic equity investment, unless it is otherwise provided for. Documents certifying the purposes of the settlement of foreign currency capital into Renminbi, including a business contract, must also be submitted for the settlement of the foreign currency. In addition, the SAFE strengthened its oversight of the flow and use of the Renminbi capital converted from foreign currency registered capital of a foreign-invested company. The use of such Renminbi capital may not be altered without the SAFE’s approval, and such Renminbi capital may not be used to repay Renminbi loans if such loans have not been used. Violations of the Circular No. 142 could result in severe monetary fines or penalties. We expect that if we convert the net proceeds from this offering into Renminbi pursuant to SAFE Circular 142, our use of Renminbi funds will be within the approved business scope of our PRC subsidiaries. Such business scope includes “technical services” which we believe permits our PRC subsidiaries to purchase or lease servers and other equipment and provide operational support to our consolidated affiliated entities. However, we may not be able to use such Renminbi funds to make equity investments in the PRC through our PRC subsidiaries.

There are no costs associated with applying for registration or approval of loans or capital contributions with or from relevant PRC governmental authorities, other than nominal processing charges. Under PRC laws and regulations, the PRC governmental authorities are required to process such approvals or registrations or deny our application within a prescribed time period which is usually less than 90 days. The actual time taken, however, may be longer due to administrative delays. We cannot assure you that we will be able to obtain these government registrations or approvals on a timely basis, if at all, with respect to our future plans to use the U.S. dollar proceeds we expect to

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receive from this offering for our expansion and operations in China. If we fail to receive such registrations or approvals, our ability to use the proceeds of this offering and to capitalize our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and ability to fund and expand our business.

Regulations on Dividend Distribution

The principal regulations governing dividend distributions of wholly foreign-owned companies include:

Ÿ the Companies Law (2005);

Ÿ the Wholly Foreign-Owned Enterprise Law (2000); and

Ÿ the Wholly Foreign-Owned Enterprise Law Implementing Rules (2001).

Under these regulations, wholly foreign-owned companies in the PRC may pay dividends only out of their accumulated profits as determined in accordance with PRC accounting standards and regulations. In addition, these wholly foreign-owned companies are required to set aside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds, until the aggregate amount of such fund reaches 50% of its registered capital. At the discretion of these wholly foreign-owned companies, they may allocate a portion of their after-tax profits based on PRC accounting standards to staff welfare and bonus funds. These reserve funds and staff welfare and bonus funds are not distributable as cash dividends.

As of September 30, 2010, the registered capital of our wholly foreign-owned subsidiaries 1Verge Internet and Jet Brilliant Beijing was US$95,200,000 and RMB1,000,000, respectively. 1Verge Internet and Jet Brilliant Beijing have not made any profits to date, and thus are not subject to the statutory reserve fund requirement. 1Verge Internet and Jet Brilliant Beijing have not and will not be able to pay dividends to our offshore entities until they generate accumulated profits and meet the requirements for statutory reserve funds. As of September 30, 2010, our PRC subsidiaries had accumulated deficits of approximately RMB109 million (US$16.3 million) in accordance with PRC accounting standards and regulations.

Regulations on Changes in the Equity Interests of Investors in Foreign Invested Enterprises

On May 28, 1997, the Ministry of Foreign Trade and Economic Cooperation, the predecessor of MOFCOM, and the SAIC jointly promulgated the Several Provisions Relating to Changes in the Equity Interests of Investors in Foreign Invested Enterprises, which took effect as of the same date. Under these provisions, the pledge of the equity interest of an investor in a foreign invested enterprise who intends to create the pledge shall be approved by the competent local branch of the MOFCOM before it becomes effective.

Our company has pledged all of its equity interest in 1Verge Internet to Venture Lending & Leasing IV, Inc., Venture Lending & Leasing V, Inc., and Venture Lending and Leasing VI, Inc. as security for one or more loan facilities in an aggregate principal amount not exceeding US$20 million for our equipment and capital financing, out of which US$14,756,098 has been drawn down as of July 15, 2010. 1Verge Internet is in the process of applying for approval from the competent local branch of the MOFCOM.

Regulations on Offshore Investment by PRC Residents

Pursuant to the SAFE’s Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents to Engage in Financing and Inbound Investment via Overseas Special Purpose

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Vehicles, generally known in China as SAFE Circular No. 75, issued on October 21, 2005, (i) a PRC citizen residing in the PRC or non-PRC citizen primarily residing in the PRC due to his or her economic tie to the PRC, who is referred to as a PRC resident in SAFE Circular No. 75, shall register with the local branch of the SAFE before it establishes or controls an overseas special purpose company, for the purpose of overseas equity financing; (ii) when a PRC resident contributes the assets of or its equity interests in a domestic enterprise into an overseas special purpose company, or engages in overseas financing after contributing assets or equity interests into an special purpose company, such PRC resident shall register his or her interest in the special purpose company and the change thereof with the local branch of the SAFE; and (iii) when the special purpose company undergoes a material event outside of China not involving inbound investments, such as change in share capital, creation of any security interests on its assets or merger and division, the PRC resident shall, within 30 days from the occurrence of such event, register such change with the local branch of the SAFE. PRC residents who are shareholders of special purpose companies established before November 1, 2005 were required to register with the local branch of the SAFE before March 31, 2006.

Under SAFE Circular No. 75, failure to comply with the registration procedures above may result in the penalties, including imposition of restrictions on a PRC subsidiary’s foreign exchange activities and its ability to distribute dividends to the overseas special purpose company. See “Risk Factors— Risks Related to Doing Business in China—PRC regulations relating to the establishment of offshore SPVs by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.”

To further clarify the implementation of SAFE Circular No. 75, the State Administration of Foreign Exchange issued Circular No. 106 on May 29, 2007. Under Circular No. 106, PRC subsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of foreign exchange registrations by the offshore holding company’s shareholders who are PRC residents in a timely manner. If these shareholders fail to comply, the PRC subsidiaries are required to report to the local branch of the State Administration of Foreign Exchange. If the PRC subsidiaries of the offshore parent company do not report to the local branch of the State Administration of Foreign Exchange, they may be prohibited from distributing their profits and proceeds from any reduction in capital, share transfer or liquidation to their offshore parent company and the offshore parent company may be restricted in its ability to contribute additional capital into its PRC subsidiaries. Moreover, failure to comply with the above foreign exchange registration requirements could result in liabilities for such PRC subsidiaries under PRC laws for evasion of foreign exchange restrictions, including (i) requirement by SAFE to return the foreign exchange remitted overseas within a period specified by SAFE, with a fine of up to 30% of the total amount of foreign exchange remitted overseas and deemed evasive and (ii) in circumstances involving serious violations, a fine of no less than 30% of and up to the total amount of remitted foreign exchange deemed evasive. Furthermore, the persons-in-charge and other persons at such PRC subsidiaries who are held directly liable for the violations may be subject to administrative sanctions.

Regulations on Employee Stock Options Plan

In December 2006, the People’s Bank of China promulgated the Administrative Measures of Foreign Exchange Matters for Individuals, setting forth the respective requirements for foreign exchange transactions by individuals (both PRC or non-PRC citizens) under either the current account or the capital account. In January 2007, the SAFE issued implementing rules for the Administrative Measures of Foreign Exchange Matters for Individuals, which, among other things, specified approval requirements for certain capital account transactions, such as a PRC citizen’s participation in employee stock ownership plans or share option plans of an overseas publicly-listed company. On March 28,

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2007, the State Administration of Foreign Exchange promulgated the Application Procedures of Foreign Exchange Administration for Domestic Individuals Participating in Employee Stock Ownership Plan or Stock Option Plan of Overseas Listed Company, or the Stock Option Rules. The purpose of the Stock Option Rules is to regulate the foreign exchange administration of PRC domestic individuals who participate in employee stock holding plans and share option plans of overseas listed companies.

According to the Stock Option Rules, if a PRC domestic individual participates in any employee stock ownership plan or share option plan of an overseas listed company, a PRC domestic qualified agent or the PRC subsidiary of such overseas listed company must, among other things, file, on behalf of such individual, an application with the SAFE or its local counterpart to obtain approval for an annual allowance with respect to the purchase of foreign exchange in connection with stock holding or share option exercises as PRC domestic individuals may not directly use overseas funds to purchase shares or exercise share options. Concurrent with the filing of such application with the SAFE or its local counterpart, the PRC domestic qualified agent or the PRC subsidiary shall obtain approval from the SAFE or its local counterpart to open a special foreign exchange account at a PRC domestic bank to hold the funds required in connection with the stock purchase or option exercise, any returned principal or profits upon sales of shares, any dividends issued on the stock and any other income or expenditures approved by the SAFE or its local counterpart. The PRC domestic qualified agent or the PRC subsidiary is also required to obtain approval from the SAFE or its local counterpart to open an overseas special foreign exchange account at an overseas trust bank with custody qualifications to hold overseas funds used in connection with any shares purchase.

Under the Foreign Currency Administration Rules, as amended in 2008, the foreign exchange proceeds of domestic entities and individuals can be remitted into China or deposited abroad, subject to the terms and conditions to be issued by the SAFE. However, the implementing rules in respect of depositing the foreign exchange proceeds abroad have not been issued by the SAFE. The foreign exchange proceeds from the sales of shares can be converted into RMB or transferred to such individuals’ foreign exchange savings account after the proceeds have been remitted back to the special foreign exchange account opened at the PRC domestic bank. If share options are exercised in a cashless exercise, the PRC domestic individuals are required to remit the proceeds to special foreign exchange accounts.

Many issues with respect to the Stock Option Rules require further interpretation. We and our PRC employees who have participated in an employee stock ownership plan or share option plan will be subject to the Stock Option Rules when our company becomes an overseas listed company. If we or our PRC employees fail to comply with the Stock Option Rules, we and our PRC employees may face sanctions imposed by the PRC foreign exchange authority or any other PRC government authorities, including restriction on foreign currency conversions and additional capital contribution to our PRC subsidiaries.

In addition, the State Administration of Taxation has issued a few circulars concerning employee share options. Under these circulars, our employees working in China who exercise share options will be subject to PRC individual income tax. Our PRC subsidiaries have obligations to file documents related to employee share options with relevant tax authorities and withhold the individual income taxes of employees who exercise their share options. If our employees fail to pay and we fail to withhold their income taxes, we may face sanctions imposed by tax authorities or any other PRC government authorities.

Labor Laws and Social Insurance

Pursuant to the PRC Labor Law and the PRC Labor Contract Law, employers must execute written labor contracts with full-time employees. All employers must compensate their employees with

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wages equal to at least the local minimum wage standards. All employers are required to establish a system for labor safety and sanitation, strictly abide by state rules and standards and provide employees with workplace safety training. Violations of the PRC Labor Contract Law and the PRC Labor Law may result in the imposition of fines and other administrative liabilities. Criminal liability may arise for serious violations.

In addition, employers in China are obliged to provide employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, medical insurance and housing funds.

To comply with these laws and regulations, we have caused all of our full-time employees to enter into labor contracts and provide our employees with the proper welfare and employment benefits.

Regulations on Overseas Listing

In 2006, six PRC regulatory agencies jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rule. This rule requires that, if an overseas company established or controlled by PRC domestic companies or citizens intends to acquire equity interests or assets of any other PRC domestic company affiliated with the PRC domestic companies or citizens, such acquisition must be submitted to the MOFCOM, rather than local regulators, for approval. In addition, this regulation requires that an overseas company controlled directly or indirectly by PRC companies or citizens and holding equity interests of PRC domestic companies needs to obtain the approval of the CSRC prior to listing its securities on an overseas stock exchange.

While the application of the new regulations remain unclear, based on their understanding of current PRC laws, regulations, and new procedures announced on September 21, 2006, our PRC counsel, TransAsia Lawyers, has advised us that:

(a) the China Securities Regulatory Commission currently has not issued any definitive rule or interpretation concerning whether offerings like ours under this prospectus are subject to this regulation; and

(b) given that 1Verge Information and 1Verge Internet were incorporated before September 8, 2006, the effective date of this regulation, and that no provision in this regulation clearly classified contractual arrangements as a type of transaction subject to its regulation, we are not required to submit an application to the China Securities Regulatory Commission for its approval of the listing and trading of our ADSs on the NYSE.

See “Risk Factors—Risks Related to Doing Business in China—The approval of the China Securities Regulatory Commission may be required in connection with this offering under a regulation adopted in August 2006, and, if required, we cannot assure you that we will be able to obtain such approval.”

Regulations on Concentration in Merger and Acquisition Transactions

The M&A Rule established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex. These rules require, among other things, that the MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor will take control of a PRC domestic enterprise or a foreign company with substantial PRC operations, if certain thresholds under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings issued by the State Council on August 3, 2008 are triggered.

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Complying with these requirements could affect our ability to expand our business or maintain our market share. See “Risk Factors—Risks Related to Doing Business in China—Recently enacted regulations in the PRC may make it more difficult for us to pursue growth through acquisitions.”

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MANAGEMENT

Directors and Executive Officers

The following table sets forth information regarding our directors and executive officers as of the date of this prospectus.

Directors and Executive Officers	Age		Position/Title
Victor Wing Cheung Koo		44	Chairman of the Board of Directors, Chief Executive Officer
George Leonard Baker Jr.		67	Independent Director
Jonathan Jia Zhu		48	Independent Director
Ye Sha		38	Independent Director
Nicholas Frederick Lawler		29	Independent Director
Bryan Zongwei Li		38	Independent Director
Dele Liu		42	Director, Chief Financial Officer, Senior Vice President
Leo Jian Yao		35	Chief Technology Officer
Frank Ming Wei		36	Senior Vice President of Operations
Sunny Xiangyang Zhu		39	Chief Editor

Victor Wing Cheung Koo is the founder of our company. Mr. Koo has served as the chairman of our board of directors and chief executive officer since our inception in September 2005. He has over 12 years of experience in Internet and media-related industries in China. From 1999 to 2005, Mr. Koo worked at Sohu, China’s leading Internet portal that is listed on the NASDAQ. Mr. Koo served in various positions at Sohu, including as president, chief operating officer and chief financial officer, helping to grow Sohu from an early-stage company to a listed Internet media property in China. Prior to joining Sohu, Mr. Koo held various senior positions in Richina Capital Partners Limited, a China-based private equity firm from 1994 to 1999, including vice president and director of business development. Prior to that, Mr. Koo worked at Procter & Gamble Co. in Hong Kong in 1993 and Bain & Company in San Francisco from 1989 to 1992. Mr. Koo received a MBA degree from Stanford University and was a Regents’ Scholar at the University of California at Berkeley, where he received a bachelor’s degree.

George Leonard Baker, Jr. has served as our director since 2007. Since 1973, Mr. Baker has been a managing director of the general partner of Sutter Hill Ventures, a venture capital firm located in Palo Alto, California. Mr. Baker currently serves on the board of Corcept Therapeutics, Inc., which is a publicly traded pharmaceutical company, as well as a number of private companies. He also serves as a director of Government of Singapore Investment Corporation Special Investments Pte Ltd., a global investment management company managing Singapore’s foreign reserves. Mr. Baker is a trustee of Yale University, where he chairs the finance committee and serves on the investment committee. Mr. Baker received a MBA degree from Stanford University and a bachelor’s degree in mathematics from Yale University.

Jonathan Jia Zhu has served as our director since 2007. Mr. Zhu has served as the managing director of Bain Capital Asia LLC, or Bain Capital, since 2006, where he is responsible for private equity investment activities in Asia and serves on the boards of Bain Capital’s various portfolio companies, including SinoMedia Holding Limited and GOME Electrical Appliances Holding Limited, both of which are listed on the Hong Kong Stock Exchange. Prior to joining Bain Capital, Mr. Zhu worked at Morgan Stanley Asia Limited from 1995 to 2006, where he became managing director in 2000 and chief executive officer of China business in 2004. Before joining Morgan Stanley, Mr. Zhu worked with Shearman & Sterling from 1992 to 1994 as an attorney. Mr. Zhu is also a board member of Nanjing University and the Hong Kong Ballet. Mr. Zhu received a J.D. degree from Cornell Law School, a master’s degree from Nanjing University and a bachelor’s degree from Zhengzhou University.

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Ye Sha has served as our director since November 2010. Mr. Sha has been a managing director of Chengwei Ventures since 2009. He also serves as a director of Sunny Optical Technology (Group) Company Limited, an optical manufacturing company listed on the Hong Kong Stock Exchange. From 2008 to 2009, Mr. Sha was the general manager of the China business at Convergys Corporation. From 2000 to 2008, he was the founder and chief executive officer of BMI Asia Inc., which was subsequently acquired by Convergys Corporation. Mr. Sha received a master’s degree in computer science from Wesleyan University and a bachelor’s degree in computer science from Shanghai Jiao Tong University.

Nicholas Frederick Lawler has served as our director since June 2008. Mr. Lawler has worked at Maverick Capital, Ltd. and its affiliates, or Maverick, one of our largest shareholders since 2004, as a financial analyst and then managing director in the media and telecom sector. Starting in 2010, he became the Asian sector head for Maverick. Mr. Lawler received a bachelor’s degree in economics with a concentration in finance with high distinction from the University of Virginia.

Bryan Zongwei Li has served as our director since November 2010. Mr. Li currently serves as an executive director and the chief financial officer of Yingli Green Energy Holding Company Limited, or Yingli, a vertically integrated photovoltaic product manufacturer in China listed on the NYSE. Prior to joining Yingli in November 2006, Mr. Li served as a senior audit manager and an audit manager at PricewaterhouseCoopers for 11 years. Mr. Li received a master’s degree in business administration from Olin School of Business of Washington University, and he graduated from the mechanical engineering department of Shanghai Institute of Technology and from the international finance and insurance department of Shanghai Institute of Business and Administration. Mr. Li is a certified member of Chinese Institute of Certified Public Accountants.

Dele Liu has served as our director since November 2010, and served as our chief financial officer and senior vice president since 2006. He has ten years of experience in the private equity industry in China. Prior to joining our company, Mr. Liu was a vice president of Power Pacific Corporation Limited, a subsidiary of Power Corporation of Canada from 1996 to 2005, during which he also served on the board of directors of a number of private companies. Mr. Liu worked at Richina Capital Partners Limited as an investment manager from 1995 to 1996. Mr. Liu attended an executive program for management development at Harvard Business School in 2001 and received a bachelor’s degree in economics from Shanghai Maritime University.

Leo Jian Yao has served as our chief technology officer since 2007, and as our chief architect from 2006 to 2007. Before joining our company, Mr. Yao served as the chief technology officer of Sino Credit Technologies (China) Inc., a leading credit card marketing portal in China, from 2005 to 2006, responsible for technology product development. From 2004 to 2005, Mr. Yao was the technology director at an affiliate of New Oriental Education & Technology Group Inc., a NYSE-listed company. From September 2000 to June 2002 and from April 2003 to May 2004, Mr. Yao was head of network operations at Sohu, responsible for 24-7 operational maintenance of Sohu. Mr. Yao received a bachelor’s degree in engineering from Southwest Jiaotong University.

Frank Ming Wei has served at various positions in our company since 2007, including senior vice president, vice president and assistant to the chief executive officer. Mr. Wei leads our sales team. Prior to joining our company, he worked as a sales director of Focus.cn, a leading real estate website in China operated by Sohu, from 2005 to 2007. From 2000 to 2005, he worked as sales manager and then assistant to the president of Sohu, where he was responsible for operations of various commercial projects. Mr. Wei received a bachelor’s degree in computer science from Southwest University.

Sunny Xiangyang Zhu has served as our chief editor since 2006. Mr. Zhu established and leads our content team. Before joining our company, he worked at Beijing Flying Network Music Software

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Development Co., Ltd. as a content director from 2004 to 2005. From 2001 to 2004, he served as the content director at China Guangya Radio Information Internet Ltd., where he was responsible for professional content syndication services. From 1999 to 2001, he worked at Sohu, building up its music and movie channels. Mr. Zhu attended the undergraduate program in Nanjing Political Institute and received a junior college diploma from Anhui University.

Board of Directors

Our board of directors currently consists of seven directors. A director is not required to hold any shares in the company by way of qualification. A director may vote with respect to any contract, proposed contract or arrangement in which he is materially interested provided the nature of the interest is disclosed prior to voting. A director may exercise all the powers of the company to borrow money, mortgage or charge its undertaking, property and uncalled capital, and issue debentures or other securities whenever money is borrowed or as security for any obligation of the company or of any third party. None of our non-executive directors has a service contract with us that provides for benefits upon termination of employment.

Committees of the Board of Directors

We have established three committees under the board of directors: the audit committee, the compensation committee and the corporate governance and nominating committee. We have adopted a charter for each of these committees. Each committee’s members and functions are described below.

Audit Committee.    Our audit committee consists of Messrs. Bryan Zongwei Li, George Leonard Baker Jr. and Ye Sha. Mr. Li is the chairman of our audit committee. Each of Messrs. Li and Baker satisfies the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE and Rule 10A-3 under the Securities Exchange Act of 1934. Mr. Sha satisfies the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things:

Ÿ selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm;

Ÿ reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response;

Ÿ reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act;

Ÿ discussing the annual audited financial statements with management and the independent registered public accounting firm;

Ÿ reviewing major issues as to the adequacy of our internal control and any special audit steps adopted in light of material control deficiencies; and

Ÿ meeting separately and periodically with management and the independent registered public accounting firm.

Compensation Committee.    Our compensation committee consists of Messrs. Ye Sha, George Leonard Baker Jr. and Nicholas Frederick Lawler. Mr. Sha is the chairman of our compensation committee. Each of Messrs. Sha, Baker and Lawler satisfies the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation,

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relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee is responsible for, among other things:

Ÿ reviewing and approving the total compensation package for our chief executive officer;

Ÿ reviewing and recommending to the board the compensation of our directors; and

Ÿ reviewing periodically and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.

Corporate Governance and Nominating Committee.     Our corporate governance and nominating committee consists of Messrs. Victor Wing Cheung Koo, Jonathan Jia Zhu, Nicholas Frederick Lawler and Bryan Zongwei Li. Each of Messrs. Zhu, Lawler and Li satisfies the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE. The corporate governance and nominating committee will assist the board of directors in identifying individuals qualified to become our directors and in determining the composition of the board and its committees. The corporate governance and nominating committee will be responsible for, among other things:

Ÿ identifying and recommending to the board nominees for election or re-election to the board, or for appointment to fill any vacancy;

Ÿ reviewing annually with the board the composition of the board in light of the characteristics of independence, age, skills, experience and availability of service to us;

Ÿ identifying and recommending to the board the directors to serve as members of the board’s committees;

Ÿ advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any corrective action to be taken; and

Ÿ monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

Duties of Directors

Cayman Islands law does not prescribe by statute the specific duties of directors of Cayman companies and therefore the duties of directors are dictated by common law. Our directors have certain duties of care, diligence and skill as well as a fiduciary duty to act in the best interests of our company. Our directors are not required to exhibit in the performance of their duties a greater degree of skill than may reasonably be expected from persons of their knowledge and experience. Our directors must exercise reasonable care and diligence but will not be liable for errors of judgment and therefore they may rely upon opinions and advice of outsiders but must still exercise their business judgment based upon such advice. The fiduciary relationship of our directors is with our company and our directors therefore do not usually owe a fiduciary duty to an individual shareholder, and instead, they owe a fiduciary duty to our shareholders as a whole. In addition, our directors have a duty to act in good faith, which means they must act bona fide in the interests of our company. Our directors must also use their powers for a proper purpose. If our directors take actions which are within their powers but for purposes other than those for which such powers were conferred, they may be liable. Our directors are also required not to put themselves into a position where there is a conflict, actual or potential, between their personal interests and their duties to our company or between their duty to our company and a duty owed to another person. Finally, our directors cannot validly contract, either with one another or with third parties, as to how they shall vote at future meetings of directors.

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Terms of Directors and Officers

Our officers are elected by and serve at the discretion of the board of directors. Our directors are not subject to a term of office and hold office until such time as they resign or are removed from office by special resolution or the unanimous written resolution of all shareholders. A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; or (ii) dies or is found by our company to be or becomes of unsound mind.

Employment Agreements

We have entered into employment agreements with each of our executive officers. We may terminate an executive officer’s employment for cause, at any time, without notice or remuneration, for certain acts of the officer, including, but not limited to, a conviction or plea of guilty to a felony, willful misconduct to our detriment or a failure to perform agreed duties. We may also terminate an executive officer’s employment without cause by a one-month prior written notice. An executive officer may terminate his or her employment with us by a one-month prior written notice for certain reasons, in which case the executive officer is entitled to the same severance benefits as in the situation of termination by us without cause.

Our executive officers have also agreed not to engage in any activities that compete with us, or to directly or indirect solicit the services of our employees, for a period of one year after termination of employment. Each executive officer has agreed to hold in strict confidence any confidential information or trade secrets of our company. Each executive officer also agrees to comply with all material applicable laws and regulations related to his or her responsibilities at our company as well as all material corporate and business policies and procedures of our company.

Compensation of Directors and Executive Officers

For the fiscal year ended December 31, 2009, we paid an aggregate of approximately RMB3.2 million (US$0.5 million) in cash to our executive officers, and we did not pay any such compensation to our non-executive directors. Our PRC subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, housing fund, unemployment and other statutory benefits.

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2006 Stock Option Scheme

On December 1, 2005, we adopted our 2006 Stock Option Scheme, or the Plan, to attract and retain the best personnel and promote the success of our business. We amended the Plan on March 26, 2007, June 20, 2008, December 16, 2009 and September 9, 2010. Our board of directors authorized the issuance and reservation of up to 140,441,231 ordinary shares as of December 16, 2009 subject to exercise of option awards granted under the Plan by the optionees. As of November 12, 2010, options to purchase 139,520,233 ordinary shares were outstanding. The following table summarizes the options we granted to some of our directors, executive officers and other individuals as a group under the Plan that were outstanding as of November 12, 2010.

Name	Ordinary Shares Underlying Outstanding Options	Exercise Price (US$/Share)	Grant Date	Expiration Date
Bryan Zongwei Li	*	0.48	November 10, 2010	November 9, 2020
Dele Liu	*	0.02	Prior to January 1, 2007	(2)
	*	0.036	February 1, 2007	January 31, 2017
	*	0.036	July 1, 2007	June 30, 2017
	*	0.081128308	March 1, 2008	February 28, 2018
	*	0.190850707	February 1, 2010	January 31, 2020
Leo Jian Yao	*	0.036	Prior to January 1, 2007	(2)
	*	0.036	February 1, 2007	January 31, 2017
	*	0.036	July 1, 2007	June 30, 2017
	*	0.081128308	March 1, 2008	February 28, 2018
	*	0.190850707	February 1, 2010	January 31, 2020
Frank Ming Wei	*	0.036	February 1, 2007	January 31, 2017
	*	0.036	July 1, 2007	June 30, 2017
	*	0.081128308	March 1, 2008	February 28, 2018
	*	0.190850707	February 1, 2010	January 31, 2020
Sunny Xiangyang Zhu	*	0.02	Prior to January 1, 2007	(2)
	*	0.036	February 1, 2007	January 31, 2017
	*	0.036	July 1, 2007	June 30, 2017
	*	0.081128308	March 1, 2008	February 28, 2018
	*	0.190850707	February 1, 2010	January 31, 2020
Other individuals as a group	106,020,233	(1)	(1)	(2)

* The aggregate number of ordinary shares underlying the outstanding options held by the option grantee is less than 1% of our total outstanding shares.

(1) We granted stock options to other individuals on the following dates and at the following exercise prices: (i) on December 1, 2005, 4,965,000 options, on February 1, 2006, 3,070,000 options and on April 1, 2006, 1,536,000 options, each with an exercise price of US$0.020 per share; (ii) on June 1, 2006, 1,075,000 options, on August 1, 2006, 547,500 options, on October 1, 2006, 985,000 options, on February 1, 2007, 14,102,500 options and on July 1, 2007, 11,225,000 options, each with an exercise price of US$0.036 per share; (iii) on December 6, 2007, 500,000 options, on January 21, 2008, 1,000,000 options and on March 1, 2008, 15,222,000 options, each with an exercise price of US$0.081128308 per share; (iv) on August 1, 2008, 2,360,000 options, on September 22, 2008, 1,500,000 options, on February 1, 2009, 11,530,000 options, on February 21, 2009, 200,000 options and on August 1, 2009, 12,243,000 options, each with an exercise price of US$0.143036134 per share; (v) on February 1, 2010, 17,179,600 options, with an exercise price of US$0.190850707 per share; (vi) on August 1, 2010, 20,079,000 options, with an exercise price of US$0.4 per share; and (vii) on November 10, 2010, 9,487,000 options, with an exercise price of US$0.48 per share. As of September 30, 2010 and November 12, 2010, 22,067,699 and 22,786,367, respectively, options had been forfeited, cancelled or exercised but not issued respectively on these dates.

(2) Each option will expire after ten years from the grant date or such shorter period as the board of directors may determine at the time of its grant.

Types of Awards.    The Plan permits the awards of options to purchase our ordinary shares.

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Plan Administration.    Subject to any specific designation in the Plan, our board of directors will administer the Plan. Our board of directors will determine the provisions and terms and conditions of each award grant. These include, among other things, the number of ordinary shares to be granted under the Plan, the grant price, exercise price, or purchase price, restrictions or limitations on the ordinary shares, restrictions on the exercise-ability of the grants, accelerations or waivers of the allotment of ordinary shares, and forms of payment upon settlement of an award.

Letter of Offer and Acceptance Form.    Each award granted under the Plan will be evidenced by a Letter of Offer that sets forth terms, conditions and limitations for each award. To validly accept the grant of options under the Plan, an optionee needs to complete, sign and return an Acceptance Form acknowledging his or her understanding and acceptance of the terms, conditions and restrictions of the grant within seven days of the receipt of Letter of Offer.

Eligibility.    At the discretion of the board of directors, we may grant awards to employees, officers, directors, advisors or consultants of our company.

Transfer Restriction.    An option, whether vested or not, shall be personal to the optionee. Subject to certain exceptions, without a prior written consent by the company, neither the option nor any interest therein may be assignable and no optionee shall in any way sell, transfer, charge, mortgage, encumber or create any interest in favor of any third party over or in relation to any option under the Plan.

Exercise Price and Term of Awards.    The board of directors shall determine the exercise price, grant price or purchase price for each award which shall be stated in the offer letter. Each option shall expire after ten years from the grant date or such shorter period as the board of directors may determine at the time of its grant.

Vesting Schedule.    In general, the vesting of the option follows the schedule below: (i) one-sixth of the option shall be vested upon the first anniversary of the grant date; (ii) one-twelfth of the option shall be vested upon the last day of each three-month period of the second and third year after the grant date; and (iii) one-twenty fourth of the option shall be vested upon the last day of each three-month period of the fourth year after the grant date. In addition, the board of directors may provide additional vesting schedule and vesting conditions in the Letter of Offer to each optionee, including without limitation performance goals to the achieved and milestone targets to be reached by the optionee.

Amendment and Termination.    Our board of directors may at any time by resolutions amend the Plan, subject to certain exceptions. In the event of an IPO, the amendment to the Plan may be effected by an ordinary shareholders resolution as necessary to comply with the law, stock exchange rules, underwriter or transacting parties’ request. The Plan may be terminated at any time before its expiration by ordinary resolutions of the board of directors or the shareholders.

2010 Share Incentive Plan

In November 2010, we adopted our 2010 Share Incentive Plan in order to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business. The plan permits the grant of options to purchase our Class A ordinary shares, restricted shares and restricted share units as deemed appropriate by the administrator under the plan. The maximum aggregate number of Class A ordinary shares that may be issued pursuant to all awards under our 2010 Share Incentive Plan is 100,000,000 shares. As of the date of this prospectus, we have not granted any awards under this plan.

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The following paragraphs describe the principal terms of our 2010 Share Incentive Plan:

Plan Administration.    The plan will be administered by a committee of one or more directors to whom the board shall delegate the authority to grant or amend awards to participants other than any of the committee members. The committee will determine the provisions and terms and conditions of each award grant.

Awards and Award Agreement.    Pursuant to our 2010 Share Incentive Plan, we may grant options, restricted shares or restricted share units to our directors, employees or consultants. Awards granted under our plan are evidenced by award agreements that set forth the terms, conditions and limitations for each award, which may include the term of an award, the provisions applicable in the event the participant’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an award.

Option Exercise Price.    The exercise price of an option shall be determined by the plan administrator and set forth in the award agreement and may be a fixed or variable price related to the fair market value of the shares, to the extent not prohibited by applicable laws. Subject to certain limits set forth in the plan, the exercise price may be amended or adjusted in the absolute discretion of the plan administrator, the determination of which shall be final, binding and conclusive. To the extent not prohibited by applicable laws or any exchange rule, a downward adjustment of the exercise prices of options shall be effective without the approval of the shareholders or the approval of the affected participants.

Eligibility.    We may grant awards to our employees, directors and consultants or those of any of our related entities, which include our subsidiaries or any entities in which we hold a substantial ownership interest, as determined by our plan administrator. Awards other than incentive share options may be granted to our employees, directors and consultants. Incentive share options may be granted only to employees of our company or a parent or a subsidiary of our company.

Term of the Awards.    The term of each award grant shall be determined by our plan administrator, provided that the term shall not exceed ten years from the date of the grant.

Vesting Schedule.    In general, the plan administrator determines, or the award agreement specifies, the vesting schedule. Restricted share granted under our 2010 Share Incentive Plan have a four-year, a three-year, a two-year or a one-year vesting schedule. We have the right to repurchase the restricted shares until vested.

Transfer Restrictions.    Except as otherwise provided by our plan administrator, an award may not be transferred or otherwise disposed of by a participant other than by will or the laws of descent and distribution. Our plan administrator by express provision in the award or an amendment may permit an award (other than an incentive share option) to be transferred to or exercised by certain persons related to the participant.

Corporate Transactions.    Except as may be provided otherwise in an individual award agreement or any other written agreement entered into by a participant and us, in the event of a change-of-control or other corporate transactions, our plan administrator may determine to provide for one or more of the following: (i) each award outstanding under the plan to terminate at a specific time in the future and give each participant the right to exercise the vested portion of the awards during a period of time as determined by our plan administrator; (ii) termination of any award in exchange for an amount of cash equal to the amount that could have been attained upon the exercise of the award; (iii) the replacement of such award with other rights or property selected by our plan administrator; (iv) the assumption of or substitution of such award by our successor, parent or subsidiary, with

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appropriate adjustments; or (v) payment of an award in cash based on the value of shares on the date of the corporate transaction plus reasonable interest on the award.

Amendment and Termination of the Plan.    With the approval of our board, our plan administrator may, at any time and from time to time, amend, modify or terminate the plan, provided, however, that no such amendment shall be made without the approval of the our shareholders to the extent such approval is required by applicable laws, or in the event that such amendment increases the number of shares available under our plan, permits our plan administrator to extend the term of our plan or the exercise period for an option beyond ten years from the date of grant, or results in a material increase in benefits or a change in eligibility requirements, unless we decides to follow home country practice.

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PRINCIPAL SHAREHOLDERS

Except as specifically noted in the table, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of the date of this prospectus by:

Ÿ each of our directors and executive officers; and

Ÿ each person known to us to own beneficially more than 5% of our ordinary shares.

Beneficial ownership is determined in accordance with the rules and regulations of the U.S. Securities and Exchange Commission and includes voting or investment power with respect to our ordinary shares. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.

	Ordinary Shares Beneficially Owned immediately prior to This  Offering				Ordinary Shares Being Sold in This Offering		Ordinary Shares Beneficially Owned after This Offering
	Number		%(2)		Number	%	Number	%(1)(2)	% of Voting Power(3)
Directors and Executive Officers:
Victor Wing Cheung Koo(4)		645,023,147		41.48%
George Leonard Baker Jr.(5)		142,227,795		9.15%
Jonathan Jia Zhu		—		—
Ye Sha(6)		641,511,207		41.25%
Nicholas Frederick Lawler		—		—
Bryan Zongwei Li(7)		*		*
Dele Liu(7)		*		*
Leo Jian Yao(7)		*		*
Frank Ming Wei(7)		*		*
Sunny Xiangyang Zhu(7)		*		*
All Directors and Executive Officers as a group(7)		828,114,002		52.37%
Principal Shareholders:
1Verge Holdings Ltd.(8)		626,773,147		40.31%
Brookside Capital Partners Fund, L.P.(9)		264,382,288		17.00%
Sutter Hill Funds(10)		192,270,567		12.36%
Maverick Funds(11)		178,365,920		11.47%
Farallon Funds(12)		172,018,194		11.06%

* Less than 1% of our total outstanding shares.

(1) Assumes that the underwriters do not exercise their option to purchase additional ADSs and no other change to the number of ADSs offered by us as set forth on the cover page of this prospectus.

(2) For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of the stock options or warrants within 60 days after the date of this prospectus. The total number of shares outstanding as of the date of this prospectus is 1,555,022,965. The total number of shares outstanding after the completion of this offering will be             .

(3) For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power with respect to all of our Class A and Class B ordinary

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shares as a single class. Each holder of our Class B ordinary shares is entitled to three votes per share and each holder of Class A ordinary shares is entitled to one vote per share held by our shareholders on all matters submitted to them for a vote. Subject to certain exceptions, our Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of our shareholders. Our Class B ordinary shares are convertible at any time by the holder into Class A ordinary shares on a 1-for-1 basis.

(4) Represents (i) 18,250,000 ordinary shares owned by 1Look Holdings Ltd., a British Virgin Islands company ultimately owned by Mr. Koo; and (ii) 346,750,000 ordinary shares and 280,023,147 ordinary shares issuable upon the conversion of 39,187,500 Series A preferred shares, 39,187,500 Series B-1 preferred shares, 35,625,000 Series B-2 preferred shares, 40,984,461 Series C preferred shares, 11,622,937 Series D preferred shares, 104,531,968 Series E preferred shares and 8,883,781 Series F preferred shares owned by 1Verge Holdings Ltd., a British Virgin Islands company owned by 1Look Holdings Ltd. and Chengwei Funds. Victor Koo and Eric Xun Li are the directors of 1Verge Holdings Ltd. Mr. Koo disclaims beneficial ownership of shares mentioned in (ii) except to the extent of his pecuniary interest therein. The business address of Mr. Koo is 5/F, SinoSteel Plaza, 8 Haidian Street, Beijing, 100080, People’s Republic of China.

(5) Represents ordinary shares issuable upon the conversion of (i) 53,005,321 Series B1 preferred shares, 27,812,560 Series B2 preferred shares, 28,864,172 Series C preferred shares, 8,223,073 Series D preferred shares and 14,100,836 Series E preferred shares held by Sutter Hill Ventures, a California Limited Partnership, of which Sutter Hill Ventures, L.L.C. is the general partner, of which Mr. Baker is one of the eleven managing directors; (ii) 1,874,300 Series B1 preferred shares, 866,191 Series B2 preferred shares, 964,730 Series C preferred shares, 271,410 Series D preferred shares and 498,619 Series E preferred shares held by Saunders Holdings, L.P., a California limited partnership of which Mr. Baker is a general partner; (iii) 2,652,821 Series B1 preferred shares, 866,191 Series B2 preferred shares, 1,238,791 Series C preferred shares and 348,513 Series D preferred shares held by Mr. Baker who is a member of our board of directors; and (iv) 640,267 Series E preferred shares held by Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO G. Leonard Baker, Jr., a California retirement trust for the benefit of Mr. Baker. Mr. Baker disclaims beneficial ownership of shares mentioned in (i) and (ii) except as to his pecuniary interest therein. The business address of Mr. Baker is 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304.

(6) Represents (i) ordinary shares issuable upon the conversion of 2,062,500 Series A preferred shares, 2,062,500 Series B1 preferred shares, 1,875,000 Series B2 preferred shares, 2,157,077 Series C preferred shares, 611,734 Series D preferred shares, 5,501,683 Series E preferred shares and 467,567 Series F preferred shares owned by Chengwei Partners, L.P., Chengwei Ventures Evergreen Fund, L.P. and Chengwei Ventures Evergreen Advisors Fund, LLC, collectively referred to as Chengwei Funds. Chengwei Funds are managed by their general partner and managing member Chengwei Ventures Evergreen Management, LLC, a Cayman Islands exempted limited liability company of which Ye Sha is a managing director and holds voting and dispositive power over the Chengwei Funds; and (ii) 346,750,000 ordinary shares and 280,023,147 ordinary shares issuable upon the conversion of 39,187,500 Series A preferred shares, 39,187,500 Series B-1 preferred shares, 35,625,000 Series B-2 preferred shares, 40,984,461 Series C preferred shares, 11,622,937 Series D preferred shares, 104,531,968 Series E preferred shares and 8,883,781 Series F preferred shares owned by 1Verge Holdings Ltd., a British Virgin Islands owned by 1Look Holdings Ltd. and Chengwei Funds. As a managing director of Chengwei Funds, Mr. Sha may be deemed to have voting and dispositive power over the shares held by 1Verge Holdings Ltd. Mr. Sha disclaims beneficial ownership of all such shares except to the extent of his pecuniary interest therein. The business address of Mr. Sha is Suite C, No. 33, Lane 672 Changle Road, Shanghai 200040.

(7) Certain of our directors and executive officers have been granted options pursuant to our 2006 Stock Option Scheme. See “Management—2006 Stock Option Scheme.”

(8) Represents 346,750,000 ordinary shares and 280,023,147 ordinary shares issuable upon the conversion of 39,187,500 Series A preferred shares, 39,187,500 Series B-1 preferred shares, 35,625,000 Series B-2 preferred shares, 40,984,461 Series C preferred shares, 11,622,937 Series D preferred shares, 104,531,968 Series E preferred shares and 8,883,781 Series F preferred shares owned by 1Verge Holdings Ltd., a British Virgin Islands company owned by 1Look Holdings Ltd. and Chengwei Funds. Victor Koo and Eric Xun Li are the directors of 1Verge Holdings Ltd. The registered address of 1Verge Holdings Ltd. is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.

(9) Represents ordinary shares issuable upon the conversion of 178,729,231 Series C preferred shares, 27,964,962 Series D preferred shares, 47,157,279 Series E preferred shares and 10,530,816 Series F preferred shares owned by Brookside Capital Partners Fund, L.P., or Brookside, a Delaware limited partnership, whose sole general partner is Brookside Capital Investors, L.P., a Delaware limited partnership, whose sole general partner is Brookside Capital Management, LLC, a Delaware limited liability company, whose sole managing member is Mr. Domenic J. Ferrante. Mr. Ferrante, by virtue of the relationships described above, may be deemed to beneficially own the shares held by Brookside. Brookside Capital Investors, L.P., Brookside Capital Management, LLC and Mr. Ferrante disclaim beneficial ownership of such shares except to the extent of their pecuniary interest therein. The address of Brookside is 111 Huntington Avenue, Boston, MA 02199.

(10) Represents all shares referenced in footnote (5) plus the ordinary shares issuable upon the conversion of 22,694,881 Series B1 preferred shares, 7,149,050 Series B2 preferred shares, 11,270,615 Series C preferred shares, 3,316,676 Series D preferred shares and 5,611,550 Series E preferred shares owned by individuals affiliated with Sutter Hill Ventures, a California Limited Partnership, and entities affiliated with such individuals. We refer to these individuals and entities affiliated with Sutter Hill Ventures collectively as Sutter Hill Funds. Together with Mr. Baker, they are the eleven managing directors of the general partner and share voting and investment decision of shares owned by Sutter Hill Ventures. The natural persons are David L. Anderson, G. Leonard Baker, Jr., Jeffrey W. Bird, Tench Coxe, James C. Gaither, Gregory P. Sands, Andrew T. Sheehan, Michael L. Speiser, David E. Sweet, James N. White and William H. Younger, Jr. The address of Sutter Hill Funds is 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304.

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(11) Represents ordinary shares issuable upon the conversion of 139,824,080 Series D preferred shares, 31,438,186 Series E preferred shares and 7,102,926 Series F preferred shares held by Maverick Fund Private Investments, Ltd., Maverick USA II, Corp. and Maverick II Holdings, Ltd. We refer to these funds collectively as Maverick Funds. Maverick Capital, Ltd. is an investment adviser and may be deemed to have beneficial ownership of the shares held by Maverick Funds through the investment discretion it exercises over these accounts. Maverick Capital Management, LLC is the general partner of Maverick Capital, Ltd. Lee S. Ainslie III is the manager of Maverick Capital Management, LLC who possesses sole investment discretion, including the ability to vote and dispose of the shares, pursuant to Maverick Capital Management, LLC’s regulations. The address of Maverick Funds is 300 Crescent Court, 18th Floor, Dallas, TX 75201.

(12) Represents ordinary shares issuable upon the conversion of 41,250,000 Series A preferred shares, 41,250,000 Series B1 preferred shares, 37,500,000 Series B2 preferred shares, 36,978,462 Series C preferred shares, 11,885,109 Series D preferred shares and 3,154,623 Series F preferred shares held by Farallon Capital Offshore Investors II, L.P., Farallon Capital Partners, L.P., Farallon Capital Institutional Partners, L.P., Farallon Capital Institutional Partners II, L.P. and Farallon Capital Institutional Partners III, L.P. We refer to these funds collectively as Farallon Funds. Farallon Partners, L.L.C. as Farallon Funds’ general partner may be deemed to be a beneficial owner of the shares held by Farallon Funds. The managing members of Farallon Partners L.L.C. with power to exercise investment discretion are: Thomas F. Steyer, Andrew J.M. Spokes, Richard B. Fried, Daniel J. Hirsch, Monica R. Landry, Davide Leone, Michael Linn, Douglas M. MacMahon, Stephen L. Millham, Rajiv A. Patel, Thomas G. Roberts, Mark C. Wehrly. The address of Farallon Capital Offshore Investors II, L.P. is Harbour Centre, P.O. Box 896, George Town Grand Cayman, Cayman Islands, and the address of the other Farallon Funds is One Maritime Plaza, Suite 2100, San Francisco, CA 94111.

As of the date of this prospectus, none of our ordinary shares is held by record holders in the United States and a total of 652,818,665 preferred shares are held by 63 record holders in the United States, representing approximately 41.98% of our total outstanding shares. None of our existing shareholders has different voting right from other shareholders after the completion of this offering. Immediately prior to the completion of this offering, our ordinary shares will be divided into Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares are entitled to one vote per share, while holders of Class B ordinary shares are entitled to three votes per share. We will issue Class A ordinary shares represented by our ADSs in this offering. Immediately prior to the completion of this offering, (i) all ordinary shares held by 1Look Holdings Ltd., which is wholly owned by Victor Koo, and its affiliates will be automatically re-designated as Class B ordinary shares on a 1-for-1 basis, (ii) all preferred shares held by Chengwei Funds and their affiliates will be automatically converted into Class B ordinary shares on a 1-for-1 basis, and (iii) all preferred shares held by our shareholders other than Chengwei Funds and their affiliates will be automatically converted into Class A ordinary shares on a 1-for-1 basis. See “Description of Share Capital—Ordinary Shares” for a more detailed description of our Class A ordinary shares and Class B ordinary shares. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

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RELATED PARTY TRANSACTIONS

Contractual Arrangements with 1Verge Information and Jiaheyi

PRC law currently limits foreign equity ownership of companies that provide Internet content and online advertising businesses. To comply with these foreign ownership restrictions, we operate our website and provide online video and online advertising services in China through a series of contractual arrangements with 1Verge Information, Jiaheyi and their respective shareholders. For a description of these contractual arrangements, see “Corporate Structure.”

Private Placements

In November 2005, we issued 60,000,000 Series A preferred shares, at a price of US$0.05 per share, to Chengwei Funds and Farallon Funds. In January 2007, we issued additional 22,500,000 Series A preferred shares to the same investors for no consideration, whereby the price per Series A preferred share was reduced to US$0.03636364.

In January 2007, we issued an aggregate of 165,825,000 Series B1 preferred shares, at a price of US$0.03636364 per share. In July 2007, we issued an aggregate of 112,875,000 Series B2 preferred shares, at a price of US$0.05333333 per share. The investors in our Series B1 and B2 preferred share private placements included Chengwei Funds, Farallon Funds and certain Sutter Hill Funds.

In November 2007, we issued an aggregate of 308,770,154 Series C preferred shares, at a price of US$0.081128308 per share, to a group of investors, including Chengwei Funds, Farallon Funds, certain Sutter Hill Funds and Brookside. On April 23, 2008, we entered into an equipment loan and security agreement with Venture Lending & Leasing IV, Inc., or VLLIV, and Venture Lending & Leasing V, Inc., or VLLV, pursuant to which VLLIV and VLLV agreed to make term loans to us from time to time in an aggregate principal amount not exceeding US$10,000,000. Under this loan agreement, we borrowed loans in an aggregate principal amount of US$9,756,098 and granted to VLLIV and VLLV warrants to purchase 8,523,082 Series C preferred shares as a partial consideration for the loans. These warrants will be exercised immediately prior to the completion of this offering.

In June 2008, we issued an aggregate of 209,737,212 Series D preferred shares, at a price of US$0.143036134 per share, to a group of investors, including Chengwei Funds, Farallon Funds, Maverick Funds, certain Sutter Hill Funds, VLLIV, VLLV and Brookside.

In November 2009, we issued an aggregate of 209,849,890 Series E preferred shares, at a price of US$0.190850707 per share, to a group of investors, including Chengwei Funds, certain Maverick Funds, certain Sutter Hill Funds and Brookside. On July 13, 2010, we entered into a working capital loan and security agreement with VLLV and Venture Lending & Leasing VI, Inc., or VLLVI, pursuant to which VLLV and VLLVI agreed to make term loans to us from time to time in an aggregate principal amount not exceeding US$10,000,000. As of the date of July 14, 2010, we borrowed loans in an aggregate principal amount of US$5,000,000 under this agreement and granted to VLLV and VLLVI warrants to purchase either Series E preferred shares or the next round preferred shares upon the exercises of warrant as a partial consideration for the loan. The remaining US$5,000,000 loan commitment under this agreement expired on October 31, 2010. These warrants will be exercised immediately prior to the completion of this offering.

In September 2010, we issued an aggregate of 100,465,709 Series F preferred shares, at a price of US$0.49768225 per share, to a group of investors, including Chengwei Funds, Farallon Funds,

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Brookside, Maverick USA II, Corp. and certain entities affiliated with T. Rowe Price New Horizons Fund, Inc. and Morgan Stanley Investment Management Small Company Growth Trust.

None of the holders of our preferred shares or warrants to purchase our preferred shares was our related party prior to each holder’s investment in our securities. The price of each series of preferred shares was determined based on arm’s-length negotiations between us and the relevant investors and was approved by our board of directors. Holders of each series of preferred shares may elect to convert part or all of the preferred shares held by them into our ordinary shares, based on the then effective conversion price. Each of Series A, B1, B2, C, D, E and F preferred shares will automatically convert into ordinary shares at their then effective conversion prices immediately prior to the closing of this offering. The initial conversion price is equal to the original per share purchase price, subject to adjustments from time to time in accordance with the applicable provisions of our current effective amended and restated memorandum and articles of association.

Shareholders’ Agreement

In connection with our Series F preferred shares private placement in September 2010, we and our shareholders entered into an amended and restated shareholders’ agreement, which amended and restated the shareholders agreements we previously entered into with the investors of our Series A, Series B1, Series B2, Series C, Series D and Series E preferred shares. Pursuant to this amended and restated shareholders’ agreement, our board of directors will consist of seven directors: one director is our chief executive officer; one is nominated by Brookside; one is nominated by Maverick Funds or their investment advisor; one is nominated by Chengwei Funds; one is nominated by Sutter Hill Funds; one is an independent director nominated by our chief executive officer and approved by each of the above directors; and one is a financial expert and an independent director nominated by our chief executive officer and approved by each of the other directors.

The convertible redeemable preferred shareholders have preemptive rights with respect to any issuance of securities by us, subject to certain exceptions, including our issuance of securities in connection with this offering. The preferred shareholders have a right of first refusal for any proposed share transfers by any of the transferring shareholders, subject to certain exceptions. In addition, under our currently effective amended and restated memorandum and articles of association, without the prior approval of the holders representing 75% or more of the preferred shares on an as-converted basis, our company shall not create or issue any new class or series of shares or debt having rights, preferences or privileges senior to or on a parity with the existing preferred shares, and shall not create any new plan for the grant of ordinary shares or ordinary shares options under the 2006 Stock Option Scheme. Under the amended and restated shareholders’ agreement, our convertible redeemable preferred shareholders and the holders of ordinary shares converted from our preferred shares are also entitled to certain registration rights, including demand registration, piggyback registration and Form F-3 registration. See “Description of Share Capital—Registration Rights.” Except for the registration rights, the shareholders’ rights under the amended and restated shareholders’ agreement will terminate automatically upon the closing of this offering.

Employment Agreements

See “Management—Employment Agreements.”

Share Options

See “Management—2006 Stock Option Scheme.”

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DESCRIPTION OF SHARE CAPITAL

We are a Cayman Islands company and our affairs are governed by our memorandum and articles of association and the Companies Law (2010 Revision) of the Cayman Islands, which is referred to as the Companies Law below.

As of the date of this prospectus, our authorized share capital, being US$50,000, is divided into 5,000,000,000 shares of par value of US$0.00001 each, comprising 3,797,418,953 ordinary shares with a par value of US$0.00001 each and 1,202,581,047 preferred shares with a par value of US$0.00001 each, of which 82,500,000 preferred shares are designated as Series A preferred shares, 165,825,000 preferred shares are designated as Series B-1 preferred shares, 112,875,000 preferred shares are designated as Series B-2 preferred shares, 317,398,462 preferred shares are designated as Series C preferred shares, 209,737,212 preferred shares are designated as Series D preferred shares, 213,779,664 preferred shares are designated as Series E preferred shares and 100,465,709 preferred shares are designated as Series F preferred shares. As of the date of this prospectus, there are 365,000,000 ordinary shares, 82,500,000 Series A preferred shares, 165,825,000 Series B-1 preferred shares, 112,875,000 Series B-2 preferred shares, 308,770,154 Series C preferred shares, 209,737,212 Series D preferred shares, 209,849,890 Series E preferred shares and 100,465,709 Series F preferred shares issued and outstanding. Immediately prior to the completion of this offering, our authorized share capital, being US$50,000, will be divided into 5,000,000,000 shares of par value US$0.00001 each, comprising (i) 3,137,657,746 Class A Ordinary Shares; (ii) 659,761,207 Class B Ordinary Shares; (iii) 82,500,000 Series A Preferred Shares; (iv) 165,825,000 Series B-1 Preferred Shares and 112,875,000 Series B-2 Preferred Shares; (v) 317,398,462 Series C Preferred Shares; (vi) 209,737,212 Series D Preferred Shares; (vii) 213,779,664 Series E Preferred Shares; and (viii) 100,465,709 Series F Preferred Shares. Immediately prior to the completion of this offering, (i) all ordinary shares held by 1Look Holdings Ltd., which is wholly owned by Victor Koo, and its affiliates will be automatically re-designated as Class B ordinary shares on a 1-for-1 basis, (ii) all preferred shares held by Chengwei Funds or their affiliates will be automatically converted into Class B ordinary shares each on a 1-for-1 basis, and (iii) all preferred shares held by our shareholders other than Chengwei Funds and their affiliates will be automatically converted into Class A ordinary shares on a 1-for-1 basis.

We will adopt a further amended and restated memorandum and articles of association prior to the completion of this offering. This new memorandum and articles of association will become effective upon completion of this offering and will replace the current amended and restated articles of association in its entirety. The following are summaries of material provisions of our proposed amended and restated memorandum and articles of association and the Companies Law insofar as they relate to the material terms of our ordinary shares that we expect will become effective upon the closing of this offering.

Ordinary Shares

General.    Upon and after the completion of this offering, our ordinary shares will be divided into Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. Certificates representing the ordinary shares are issued in registered form. Our shareholders who are nonresidents of the Cayman Islands may freely hold and vote their shares.

Dividends.    The holders of our ordinary shares are entitled to such dividends as may be declared by our board of directors subject to the Companies Law. The Companies Law provides, in summary, that dividends may be paid out of profits and/or our share premium account provided that in the case of our share premium account, no such distribution or dividend paid to our shareholders will cause us to

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be unable to pay our debts as they fall due in the ordinary course of our business. In addition, the Companies Law prevents us from offering our shares or securities to individuals within the Cayman Islands which may limit our ability to distribute a dividend comprised of our shares or other securities.

Conversion.    Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any transfer of Class B ordinary shares by a holder thereof to any person or entity which is not an affiliate of such holder, such Class B ordinary shares shall be automatically and immediately converted into an equal number of Class A ordinary shares.

Voting Rights.    In respect of matters requiring shareholders’ votes, each Class A ordinary share is entitled to one vote and each Class B ordinary share is entitled to three votes. In addition, the following matters are subject to the approval by the holders representing a majority of the aggregate voting power of our company and also by the holders of a majority of total outstanding Class A ordinary shares: (i) a change of control event, (ii) issuance of that number of ordinary shares, or of securities convertible into or exercisable for that number of ordinary shares, equal to or in excess of 20% of the number of all ordinary shares outstanding immediately prior to the issuance of such shares or securities on an as-converted basis, if (x) such ordinary shares are sold at a per share price less than the per share book or market value of the ordinary shares or (y) such securities convertible into or exercisable for the ordinary shares have a per share conversion or exercise price which is less than the per share book or market value of the ordinary share; (iii) election of director(s) to the board at an annual general meeting; and (iv) issuance of ordinary shares or of securities convertible into or exercisable for ordinary shares to a director, officer or substantial security holder of our company on an individual basis exceeding either 1% of the total outstanding ordinary shares on an as-converted basis or 1% of the aggregate voting power outstanding before such issuance. Voting at any shareholder’s meeting is by show of hands unless a poll is demanded. A poll may be demanded by our chairman or any shareholder holding at least 10% of the shares given a right to vote at the meeting, present in person or by proxy.

A quorum required for a meeting of shareholders consists of at least two shareholders present in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative. Shareholders’ meetings are held annually and may be convened by our board of directors on its own initiative or upon a request to the directors by shareholders holding in aggregate at least 10% of our voting share capital. Advance notice of at least seven days is required for the convening of our annual general meeting and other shareholders’ meetings.

An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares cast in a general meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes cast attaching to the ordinary shares. A special resolution is required for important matters such as a change of name. Holders of the ordinary shares may effect certain changes by ordinary resolution, including alter the amount of our authorized share capital, consolidate and divide all or any of our share capital into shares of larger amount than our existing share capital, and cancel any shares.

Transfer of Shares.    Subject to our memorandum and articles of association, which allows our directors to decline to register a transfer of any share which is not fully paid or on which we have lien and to decline to recognize an instrument of transfer should it fail to comply with the form prescribed by our board or our transfer agent, any of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or any other form approved by our board.

Liquidation.    On a liquidation, winding up or otherwise, before any distribution or payment shall be made to the holders of ordinary shares, an amount shall be paid for the preferred shares. Assets

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available for distribution among the holders of ordinary shares shall be distributed among the holders of the ordinary shares on a pro rata basis. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders proportionately.

Calls on Shares and Forfeiture of Shares.    Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least 14 days prior to the specified time and place of payment. The shares that have been called upon and remain unpaid on the specified time are subject to forfeiture.

Redemption of Shares.    The provisions of the Companies Law, in summary, provides that we may issue shares which are to be redeemed or are liable to be redeemed at the option of our directors or a shareholder. In addition, the Companies Law allows us to purchase our own shares, including any redeemable shares. Shares to be purchased or redeemed must be fully paid and there must remain at least one shareholder of the company holding shares. Share re-purchases or redemptions may be funded out of profits, capital or share premium, but to the extent funds other than profits are used, it is statutorily required that we be able to pay our debts as they fall due in our ordinary course of business following such a purchase or redemption. Subject to these provisions, our articles of association allow us to issue shares on terms that are subject to redemption, at our option or at the option of the holders, on such terms and in such manner as may be determined by special resolution.

Variations of Rights of Shares.    All or any of the special rights attached to any class of shares may, subject to the provisions of our articles of association, be varied either with the written consent of the holders of 75% of the issued shares of that class or with the sanction of a special resolution passed at a general meeting of the holders of the shares of that class. The rights conferred upon the holders of the shares of any class shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking in priority to or pari passu with such previously existing shares.

Inspection of Books and Records.    Holders of our ordinary shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records, with the exception that, pursuant to statutory requirements, any of our creditors or shareholders may inspect our register of mortgages and charges, which includes details of any mortgage or charge having an affect on our assets. We will provide our shareholders with annual audited financial statements. See “Additional Information.”

Anti-Takeover Provisions.    Some provisions of our post-offering memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that:

Ÿ authorize our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders; and

Ÿ establish advance notice requirements for nominating board of directors nominees or for proposing matters that can be acted on by shareholders at annual shareholder meetings.

However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our memorandum and articles of association for a proper purpose and for what they believe in good faith to be in the best interests of our company.

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History of Securities Issuances

The following is a summary of our securities issuances since the inception of Youku.com Inc.

Ordinary shares.    We were incorporated in the Cayman Islands on September 20, 2005. Upon incorporation, we issued 365,000,000 ordinary shares with a par value of US$0.00001 per share to 1Look Holdings Ltd., a BVI company 100% owned by our founder Mr. Victor Koo. As of the date of this prospectus, there were 3,797,418,953 ordinary shares authorized and 365,000,000 ordinary shares issued and outstanding.

Preferred Shares.    See “Related Party Transactions—Private placements” for a description of preferred shares we have issued as of the date of this prospectus.

Option Grants.    We granted to certain of our directors, officers and employees options to purchase an aggregate of 139,520,233 ordinary shares that were outstanding as of November 12, 2010. See “Management—2006 Stock Option Scheme.”

We believe that each of the above issuances was exempt from registration under the Securities Act in reliance on Regulation S under the Securities Act, Section 4(2) of the Securities Act or Rule 701 under the Securities Act regarding transactions not involving a public offering. No underwriters were involved in any of these issuances.

Exempted Company

We are an exempted company duly incorporated with limited liability under the Companies Law. The Companies Law distinguishes between ordinary resident companies and exempted companies. Any company, the objects of which are to conduct business mainly outside of the Cayman Islands, may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the material exemptions and privileges, including (a) an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies, (b) an exempted company is not required to open its register of members for inspection, (c) an exempted company does not have to hold an annual general meeting, (d) an exempted company may in certain circumstances issue no par value, negotiable or bearer shares, and (e) an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands.

Furthermore, the Companies Law provides that the ownership of shares in Cayman Islands companies is determined by the entry of shareholders in a company’s statutory register of members. Therefore, the shares that are the subject of this offering or any future offering or trading will be considered to have been validly issued pursuant to our amended and restated memorandum and articles of association once the issuance has been duly authorized and once our register of members has been updated to reflect their issuance.

Differences in Corporate Law

The Companies Law is based historically on that of the United Kingdom but there are substantial differences from current English law. In addition, the Companies Law differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Law applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.

Mergers and Similar Arrangements.    The Companies Law permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies, provided that the surviving company is a Cayman Islands company. For these purposes, (a) “merger” means the merging of two or more constituent companies and the vesting of

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their undertaking, property and liabilities in one of such companies as the surviving company, and (b) a “consolidation” means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a shareholder resolution of each constituent company passed by a majority in number representing 75% in value of the shareholders voting together as one class; and (b) if the shares to be issued to each shareholder in the consolidated or surviving company will have the same rights and economic value as the shares held in the relevant constituent company, a special resolution of the shareholders of each constituent company voting together as one class. In either case, a shareholder shall have the right to vote regardless of whether the shares that he or she holds otherwise give him or her voting rights. Once approved, the plan must be filed with the Registrar of Companies together with, among other things, a declaration as to the solvency of the consolidated or surviving company, a list of the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and published in the Cayman Islands Gazette. Dissenting shareholders have the right to be paid the fair value of their shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) if they follow the required procedures, subject to certain exceptions. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.

In addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies by way of a scheme of arrangement provided that the arrangement is approved by a majority in number representing seventy-five (75) per cent in value of the shareholders or creditors or class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The meeting to approve the proposed scheme must be convened by the Grand Court of the Cayman Islands and the scheme of arrangement as approved by the shareholders or creditors must then be sanctioned by the Grand Court of the Cayman Islands, and does not become binding until a copy of the order sanctioning the scheme is delivered to the Registrar of Companies for registration. Persons voting at the court meeting and where the court determines, other persons with a substantial interest, may be heard at the hearing of the petition. The court must be satisfied of the following:

Ÿ the statutory provisions were complied with, including notification to affected persons as required by the Court order convening the meeting, dispatch of the scheme document and approval of the scheme by the requisite majorities;

Ÿ the class was fairly represented by those who attended the meeting and the statutory majority were acting bona fide and were not coercing the minority in order to promote interests adverse to those of the class to whom they purported to represent; and

Ÿ the proposal is such that an intelligent and honest man, a member of the class concerned and acting in respect of his interests, might reasonably approve.

When a take-over offer is made and 90.0% of the holders of the shares accept the offer within four months of the offer having been made, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer and the offeror would likewise be obligated to acquire such shares unless otherwise ordered by the Court. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed unless there is evidence of fraud, bad faith or collusion.

If the arrangement and reconstruction is thus approved, the dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of United States corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

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Shareholders’ Suits.    In principle, we will normally be the proper plaintiff and a derivative action may not be brought by a minority shareholder. However, based on English authority, which has been applied in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:

Ÿ a company is acting or proposing to act illegally or ultra vires;

Ÿ the act complained of, although not ultra vires, could be effected duly if authorized by more than a simple majority vote which has not been obtained; and

Ÿ those who control the company are perpetrating a “fraud on the minority.”

Transactions with Directors.    Under the Delaware General Corporation Law, or the DGCL, transactions with directors must be approved by disinterested directors or by the shareholders, or otherwise proven to be fair to the company as of the time it is approved. Such transaction will be void or voidable, unless (i) the material facts of any interested directors, interests are disclosed or are known to the board of directors and the transaction is approved by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; (ii) the material facts of any interested directors, interests are disclosed or are known to the shareholders entitled to vote thereon, and the transaction is specifically approved in good faith by vote of the shareholders; or (iii) the transaction is fair to the company as of the time it is approved.

Cayman Islands laws do not restrict transactions with directors, except that they require that directors exercise a duty of care and owe a fiduciary duty to the companies for which they serve among other things more particularly described below. Under our amended and restated memorandum and articles of association, subject to any separate requirement for audit committee approval under the applicable rules of                      or unless disqualified by the chairman of the relevant board meeting, so long as a director discloses the nature of his interest in any contract or arrangement in which he is interested, such a director may vote in respect of any contract or proposed contract or arrangement in which such director is interested and may be counted in the quorum at such a meeting.

Directors’ Fiduciary Duties.    Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care generally requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, but subject to certain exceptions, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties.

Under Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company, and therefore it is considered that he or she owes the following duties to the company: a duty to act bona fide in the best interests of the company; a duty not to make a profit out of his or her position as director (unless the company permits him or her to do so); and a duty not to put himself or herself in a position where the interests of the company conflict with his or her personal interests or his or her duty to a third party. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her knowledge and experience. However, there are indications that the courts are moving towards an objective standard with regard to the required skill and care.

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Under our post-offering amended and restated memorandum and articles of association, directors who are in any way, whether directly or indirectly, interested in a contract or proposed contract with our company shall declare the nature of their interest at a meeting of the board of directors. Following such declaration, a director may vote in respect of any contract or proposed contract notwithstanding his interest.

Majority Independent Board.    A domestic U.S. company listed on the NYSE must comply with NYSE requirement that a majority of the board of directors must be comprised of independent directors as defined under Section 303A of the Corporate Governance Rules of the NYSE. As a Cayman Islands corporation, we are allowed to follow home country practices in lieu of certain corporate governance requirements under the NYSE rules where there is no similar requirement under the laws of the Cayman Islands. However, we have no present intention to rely on home country practice with respect to our corporate governance matters, and we intend to comply with the NYSE rules after the completion of this offering.

Shareholder Action by Written Consent.    Under the DGCL, a corporation may eliminate the right of shareholders to act by written consent by inclusion of such a restriction in its certificate of incorporation. Cayman Islands law and our post-offering articles of association provide that shareholders may approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.

Shareholder Proposals and Meeting of Shareholders.    The DGCL does not provide shareholders an express right to put any proposal before the annual meeting of shareholders, but in keeping with common law, Delaware corporations generally afford shareholders an opportunity to make proposals and nominations provided that they comply with the notice provisions in the certificate of incorporation or bylaws. A special meeting may be called by the board of directors or any other person authorized to do so in the certificate of incorporation or bylaws, but shareholders may be precluded from calling special meetings.

Cayman Islands law does not provide shareholders any right to bring business before a meeting or requisition a general meeting. However, these rights may be provided in the articles of association of a Cayman Islands company. Our post-offering memorandum and articles of association allow our shareholders holding not less than one-third of our paid-up voting share capital to requisition an extraordinary general meeting of the shareholders, in which case the directors are obliged to call such meeting and to put the resolutions so requisitioned to a vote at such meeting. However, our articles do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders.

As a Cayman Islands exempted company, we are not obliged by the Companies Law to call shareholders’ annual general meetings and our post-offering articles of association provide that we may (but are not obliged to) hold an annual general meeting. We will, however, be required by the rules of the NYSE to hold an annual general meeting as our annual general meeting, and therefore we shall specify the meeting as such in the notices calling it, and the annual general meeting shall be held at such time and place as may be determined by our directors.

Cumulative Voting.    Under the DGCL, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.

There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands, but our post-offering articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

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Removal of Directors.    Under the DGCL, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our post-offering articles of association, directors can be removed by a special resolution of shareholders.

Transactions with Interested Shareholders.    The DGCL contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by an amendment to its certificate of incorporation or bylaws that is approved by its shareholders, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns 15% or more of the corporation’s outstanding voting stock or who or which is an affiliate or associate of the corporation and owned 15% or more of the corporation’s outstanding voting stock within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.

Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on the minority shareholders.

Amendment of Governing Documents.    Under the DGCL, a corporation’s certificate of incorporation may be amended only if adopted and declared advisable by the board of directors and approved by a majority of the outstanding shares entitled to vote, and the bylaws may be amended with the approval of a majority of the outstanding shares entitled to vote and may, if so provided in the certificate of incorporation, also be amended by the board of directors. As permitted by Cayman Islands law, our post-offering memorandum and articles of association may be amended with a special resolution.

Rights of Non-resident or Foreign Shareholders.    There are no limitations imposed by our amended and restated memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our post-offering memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.

Indemnification.    Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime.

We intend to adopt an amended and restated memorandum and articles of association upon the closing of this offering. Under our amended and restated memorandum and articles of association, we may indemnify our directors, officers, employees and agents against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by such persons in connection with actions, suits or proceedings to which they are party or are threatened to be made a party by reason of their acting as our directors, officers, employees or agents. To be entitled to indemnification, these persons must have acted in good faith and in the best interest and not contrary to the interest of our

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company, and must not have acted in a manner willfully or grossly negligent and, with respect to any criminal action, they must have had no reasonable cause to believe their conduct was unlawful. Our amended and restated memorandum and articles of association may also provide for indemnification of such person in the case of a suit initiated by our company or in the right of our company.

We intend to enter into indemnification agreements with our directors and executive officers to indemnify them to the fullest extent permitted by applicable law and our articles of association, from and against all costs, charges, expenses, liabilities and losses incurred in connection with any litigation, suit or proceeding to which such director is or is threatened to be made a party, witness or other participant.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us under the foregoing provisions, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and therefore is unenforceable.

Registration Rights

Pursuant to our current amended and restated shareholders’ agreement entered into in September 2010, we have granted certain registration rights to holders of our registrable securities, which include our preferred shares and ordinary shares converted from our preferred shares. Set forth below is a description of the registration rights granted under this agreement.

Demand Registration Rights.    Holders of registrable securities have the right to demand that we file a registration statement covering the offer and sale of their securities. We, however, are not obligated to effect a demand registration if, among other things, we have already effected two demand registrations. We have the right to defer filing of a registration statement for up to 90 days if our board of directors determine in good faith that filing of a registration will be materially detrimental to us, but we cannot exercise the deferral right more than once in any twelve-month period.

Form F-3 Registration Rights.    When we are eligible for use of Form F-3, holders of registrable securities then outstanding have the right to request that we file a registration statement under Form F-3 as long as the reasonably anticipated gross proceeds of the registration exceed US$5 million (or, in the case of registrable securities proposed to be sold by a holder of Series C, Series D, Series E or Series F preferred shares, the reasonably anticipated gross proceeds exceed US$1 million). We, however, are not obligated to effect a registration on Form F-3 if, among other things, we have already effected two registrations within any twelve-month period preceding the date of the registration request. We have the right to defer filing of a registration statement for up to 90 days if our board of directors determine in good faith that filing of a registration will be materially detrimental to us, but we cannot exercise the deferral right more than once in any twelve-month period.

Piggyback Registration Rights.    If we propose to file a registration statement in connection with a public offering of securities of our company other than relating to a company stock plan or corporate reorganization, then we must offer each holder of the registrable securities the opportunity to include their shares in the registration statement. We must use our reasonable best efforts to cause the underwriters in any underwritten offering to permit any such shareholder who so requests to include their shares. Such requests for registrations are not counted as demand registrations.

Expenses of Registration.    We will pay all expenses relating to any demand, piggyback or Form F-3 registration, except for underwriting discounts and commissions relating to the sale of registrable securities, unless, subject to a few exceptions, a registration request is subsequently withdrawn at the request of the holders of registrable securities.

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DESCRIPTION OF AMERICAN DEPOSITARY SHARES

Citibank, N.A. has agreed to act as the depositary for the ADSs. Citibank’s depositary offices are located at 388 Greenwich Street, New York, New York 10013. ADSs represent ownership interests in securities that are on deposit with the depositary. ADSs may be represented by certificates that are commonly known as American Depositary Receipts or ADRs. The depositary typically appoints a custodian to safekeep the securities on deposit. In this case, the custodian is Citibank, N.A.—Hong Kong, located at 10/F, Harbour Front (II), 22 Tak Fung Street, Hung Hom, Kowloon, Hong Kong.

We will appoint Citibank as depositary pursuant to a deposit agreement. A copy of the deposit agreement is on file with the SEC under cover of a Registration Statement on Form F-6. You may obtain a copy of the deposit agreement from the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 and from the SEC’s website (www.sec.gov).

We are providing you with a summary description of the material terms of the ADSs and of your material rights as an owner of ADSs. Please remember that summaries by their nature lack the precision of the information summarized and that the rights and obligations of an owner of ADSs are detailed in the deposit agreement. We urge you to review the deposit agreement in its entirety.

Each ADS represents the right to receive              Class A ordinary shares on deposit with the custodian. An ADS also represents the right to receive any other property received by the depositary or the custodian on behalf of the owner of the ADS but that has not been distributed to the owners of ADSs because of legal restrictions or practical considerations.

If you become an owner of ADSs, you will become a party to the deposit agreement and therefore will be bound to its terms and to the terms of any ADR that represents your ADSs. The deposit agreement and the ADR specify our rights and obligations as well as your rights and obligations as owner of ADSs and those of the depositary. As an ADS holder you appoint the depositary to act on your behalf in certain circumstances. The deposit agreement and the ADRs are governed by New York law. However, our obligations to the holders of ordinary shares will continue to be governed by the laws of the Cayman Islands, which may be different from the laws in the United States.

In addition, applicable laws and regulations may require you to satisfy reporting requirements and obtain regulatory approvals in certain circumstances. You are solely responsible for complying with such reporting requirements and obtaining such approvals. Neither the depositary, the custodian, we nor any of their or our respective agents or affiliates shall be required to take any actions whatsoever on behalf of you to satisfy such reporting requirements or obtain such regulatory approvals under applicable laws and regulations.

As an owner of ADSs, you may hold your ADSs either by means of an ADR registered in your name, through a brokerage or safekeeping account, or through an account established by the depositary in your name reflecting the registration of uncertificated ADSs directly on the books of the depositary (commonly referred to as the direct registration system or DRS). The direct registration system reflects the uncertificated (book-entry) registration of ownership of ADSs by the depositary. Under the direct registration system, ownership of ADSs is evidenced by periodic statements issued by the depositary to the holders of the ADSs. The direct registration system includes automated transfers between the depositary and The Depository Trust Company, or DTC, the central book-entry clearing and settlement system for equity securities in the United States. If you decide to hold your ADSs through your brokerage or safekeeping account, you must rely on the procedures of your broker or bank to assert your rights as ADS owner. Banks and brokers typically hold securities such as the ADSs through clearing and settlement systems such as DTC. The procedures of such clearing and settlement systems may limit your ability to exercise your rights as an owner of ADSs. Please consult

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with your broker or bank if you have any questions concerning these limitations and procedures. All ADSs held through DTC will be registered in the name of a nominee of DTC. This summary description assumes you have opted to own the ADSs directly by means of an ADS registered in your name and, as such, we will refer to you as the “holder.”

Dividends and Distributions

As a holder, you generally have the right to receive the distributions we make on the securities deposited with the custodian. Your receipt of these distributions may be limited, however, by practical considerations and legal limitations. Holders will receive such distributions under the terms of the deposit agreement in proportion to the number of ADSs held as of a specified record date.

Distributions of Cash

Whenever we make a cash distribution for the securities on deposit with the custodian, we will deposit the funds with the custodian. Upon receipt of confirmation of the deposit of the requisite funds, the depositary will arrange for the funds to be converted into U.S. dollars and for the distribution of the U.S. dollars to the holders, subject to the laws and regulations of the Cayman Islands.

The conversion into U.S. dollars will take place only if practicable and if the U.S. dollars are transferable to the United States. The amounts distributed to holders will be net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. The depositary will apply the same method for distributing the proceeds of the sale of any property (such as undistributed rights) held by the custodian in respect of securities on deposit.

The distribution of cash will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement.

Distributions of Shares

Whenever we make a free distribution of ordinary shares for the securities on deposit with the custodian, we will deposit the applicable number of ordinary shares with the custodian. Upon receipt of confirmation of such deposit, the depositary will either distribute to holders new ADSs representing the ordinary shares deposited or modify the ADS-to-ordinary share ratio, in which case each ADS you hold will represent rights and interests in the additional ordinary shares so deposited. Only whole new ADSs will be distributed. Fractional entitlements will be sold and the proceeds of such sale will be distributed as in the case of a cash distribution.

The distribution of new ADSs or the modification of the ADS-to-ordinary share ratio upon a distribution of ordinary shares will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order to pay such taxes or governmental charges, the depositary may sell all or a portion of the new ordinary shares so distributed.

No such distribution of new ADSs will be made if it would violate a law (including U.S. securities laws) or if it is not operationally practicable. If the depositary does not distribute new ADSs as described above, it may sell the ordinary shares received upon the terms described in the deposit agreement and will distribute the proceeds of the sale as in the case of a distribution of cash.

Distributions of Rights

Whenever we intend to distribute rights to purchase additional ordinary shares, we will give prior notice to the depositary and we will assist the depositary in determining whether it is lawful and reasonably practicable to distribute rights to purchase additional ADSs to holders.

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The depositary will establish procedures to distribute rights to purchase additional ADSs to holders and to enable such holders to exercise such rights if it is lawful and reasonably practicable to make the rights available to holders of ADSs, and if we provide all of the documentation contemplated in the deposit agreement (such as opinions to address the lawfulness of the transaction). You may have to pay fees, expenses, taxes and other governmental charges to subscribe for the new ADSs upon the exercise of your rights. The depositary is not obligated to establish procedures to facilitate the distribution and exercise by holders of rights to purchase new ordinary shares other than in the form of ADSs.

The depositary will not distribute the rights to you if:

Ÿ we do not timely request that the rights be distributed to you or we request that the rights not be distributed to you; or

Ÿ we fail to deliver satisfactory documents to the depositary; or

Ÿ it is not reasonably practicable to distribute the rights.

The depositary will sell the rights that are not exercised or not distributed if such sale is lawful and reasonably practicable. The proceeds of such sale will be distributed to holders as in the case of a cash distribution. If the depositary is unable to sell the rights, it will allow the rights to lapse.

Elective Distributions

Whenever we intend to distribute a dividend payable at the election of shareholders either in cash or in additional shares, we will give prior notice thereof to the depositary and will indicate whether we wish the elective distribution to be made available to you. In such case, we will assist the depositary in determining whether such distribution is lawful and reasonably practicable.

The depositary will make the election available to you only if it is reasonably practicable and if we have provided all of the documentation contemplated in the deposit agreement. In such case, the depositary will establish procedures to enable you to elect to receive either cash or additional ADSs in each case as described in the deposit agreement.

If the election is not made available to you, you will receive either cash or additional ADSs, depending on what a holder of ordinary shares would receive upon failing to make an election.

Other Distributions

Whenever we intend to distribute property other than cash, ordinary shares or rights to purchase additional ordinary shares, we will notify the depositary in advance and will indicate whether we wish such distribution to be made to you. If so, we will assist the depositary in determining whether such distribution to holders is lawful and reasonably practicable.

If it is reasonably practicable to distribute such property to you and if we provide all of the documentation contemplated in the deposit agreement, the depositary will distribute the property to the holders in a manner it deems practicable.

The distribution will be made net of fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order to pay such taxes and governmental charges, the depositary may sell all or a portion of the property received.

The depositary will not distribute the property to you and will sell the property if:

Ÿ we do not request that the property be distributed to you or if we ask that the property not be distributed to you; or

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Ÿ we do not deliver satisfactory documents to the depositary; or

Ÿ the depositary determines that all or a portion of the distribution to you is not reasonably practicable.

The proceeds of such a sale will be distributed to holders as in the case of a cash distribution.

Redemption

Whenever we decide to redeem any of the securities on deposit with the custodian, we will notify the depositary in advance. If it is practicable and if we provide all of the documentation contemplated in the deposit agreement, the depositary will provide notice of the redemption to the holders.

The custodian will be instructed to surrender the shares being redeemed against payment of the applicable redemption price. The depositary will convert the redemption funds received into U.S. dollars upon the terms of the deposit agreement and will establish procedures to enable holders to receive the net proceeds from the redemption upon surrender of their ADSs to the depositary. You may have to pay fees, expenses, taxes and other governmental charges upon the redemption of your ADSs. If less than all ADSs are being redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as the depositary may determine.

Changes Affecting Class A Ordinary Shares

The Class A ordinary shares held on deposit for your ADSs may change from time to time. For example, there may be a change in nominal or par value, a split-up, cancellation, consolidation or reclassification of such Class A ordinary shares or a recapitalization, reorganization, merger, consolidation or sale of assets.

If any such change were to occur, your ADSs would, to the extent permitted by law, represent the right to receive the property received or exchanged in respect of the Class A ordinary shares held on deposit. The depositary may in such circumstances deliver new ADSs to you, amend the deposit agreement, the ADRs and the applicable Registration Statement(s) on Form F-6, call for the exchange of your existing ADSs for new ADSs and take any other actions that are appropriate to reflect as to the ADSs the change affecting the Class A ordinary shares. If the depositary may not lawfully distribute such property to you, the depositary may sell such property and distribute the net proceeds to you as in the case of a cash distribution.

Issuance of ADSs upon Deposit of Class A Ordinary Shares

The depositary may create ADSs on your behalf if you or your broker deposit Class A ordinary shares with the custodian. The depositary will deliver these ADSs to the person you indicate only after you pay any applicable issuance fees and any charges and taxes payable for the transfer of the Class A ordinary shares to the custodian. Your ability to deposit Class A ordinary shares and receive ADSs may be limited by U.S. and Cayman Islands legal considerations applicable at the time of deposit.

The issuance of ADSs may be delayed until the depositary or the custodian receives confirmation that all required approvals have been given and that the Class A ordinary shares have been duly transferred to the custodian. The depositary will only issue ADSs in whole numbers.

When you make a deposit of Class A ordinary shares, you will be responsible for transferring good and valid title to the depositary. As such, you will be deemed to represent and warrant that:

Ÿ The Class A ordinary shares are duly authorized, validly issued, fully paid, non-assessable and legally obtained.

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Ÿ All preemptive (and similar) rights, if any, with respect to such Class A ordinary shares have been validly waived or exercised.

Ÿ You are duly authorized to deposit the Class A ordinary shares.

Ÿ The Class A ordinary shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, and are not, and the ADSs issuable upon such deposit will not be, “restricted securities” (as defined in the deposit agreement).

Ÿ The Class A ordinary shares presented for deposit have not been stripped of any rights or entitlements.

If any of the representations or warranties are incorrect in any way, we and the depositary may, at your cost and expense, take any and all actions necessary to correct the consequences of the misrepresentations.

Transfer, Combination and Split Up of ADRs

If you hold ADRs, you will be entitled to transfer, combine or split up your ADRs and the ADSs evidenced thereby. For transfers of ADRs, you will have to surrender the ADRs to be transferred to the depositary and also must:

Ÿ ensure that the surrendered ADR certificate is properly endorsed or otherwise in proper form for transfer;

Ÿ provide such proof of identity and genuineness of signatures as the depositary deems appropriate;

Ÿ provide any transfer stamps required by the State of New York or the United States; and

Ÿ pay all applicable fees, charges, expenses, taxes and other government charges payable by ADR holders pursuant to the terms of the deposit agreement, upon the transfer of ADRs.

To have your ADRs either combined or split up, you must surrender the ADRs in question to the depositary with your request to have them combined or split up, and you must pay all applicable fees, charges and expenses payable by ADR holders pursuant to the terms of the deposit agreement upon a combination or split up of ADRs.

Withdrawal of Class A Ordinary Shares Upon Cancellation of ADSs

As a holder, you will be entitled to present your ADSs to the depositary for cancellation and then receive the corresponding number of underlying Class A ordinary shares at the custodian’s offices. Your ability to withdraw the Class A ordinary shares may be limited by U.S. and Cayman Islands legal considerations applicable at the time of withdrawal. In order to withdraw the Class A ordinary shares represented by your ADSs, you will be required to pay to the depositary the fees for cancellation of ADSs and any charges and taxes payable upon the transfer of the Class A ordinary shares being withdrawn. You assume the risk for delivery of all funds and securities upon withdrawal. Once canceled, the ADSs will not have any rights under the deposit agreement.

If you hold ADSs registered in your name, the depositary may ask you to provide proof of identity and genuineness of any signature and such other documents as the depositary may deem appropriate before it will cancel your ADSs. The withdrawal of the Class A ordinary shares represented by your ADSs may be delayed until the depositary receives satisfactory evidence of compliance with all applicable laws and regulations. Please keep in mind that the depositary will only accept ADSs for cancellation that represent a whole number of securities on deposit.

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You will have the right to withdraw the Class A ordinary shares represented by your ADSs at any time except for:

Ÿ temporary delays that may arise because (i) the transfer books for the Class A ordinary shares or ADSs are closed or (ii) Class A ordinary shares are immobilized on account of a shareholders’ meeting or a payment of dividends;

Ÿ obligations to pay fees, taxes and similar charges; and

Ÿ restrictions imposed because of laws or regulations applicable to ADSs or the withdrawal of securities on deposit.

The deposit agreement may not be modified to impair your right to withdraw the securities represented by your ADSs except to comply with mandatory provisions of law.

Voting Rights

As a holder, you generally have the right under the deposit agreement to instruct the depositary to exercise the voting rights for the Class A ordinary shares represented by your ADSs. The voting rights of holders of ordinary shares are described in the Section entitled “Description of Share Capital—Ordinary Shares—Voting Rights.”

If we ask for your instructions in a timely manner pursuant to the deposit agreement, as soon as practicable after receiving notice of any meeting or solicitation of consents or proxies from us, the depositary will distribute to the registered ADS holders a notice stating such information as is contained in the voting materials received by the depositary and describing how you may instruct the depositary to exercise the voting rights for the shares which underlie your ADSs, including circumstances under which a discretionary proxy may be given to a person designated by us. At our request, the depositary will distribute to you any notice of shareholders’ meeting received from us together with information explaining how to instruct the depositary to exercise the voting rights of the securities represented by ADSs.

Voting at our shareholders’ meetings is by show of hands unless a poll is demanded. A poll may be demanded by the chairman of our board of directors or any shareholder holding at least 10% of the shares given a right to vote at such meeting, present in person or by proxy. If the depositary timely receives voting instructions from a holder of ADSs, the depositary will endeavor to cause the Class A ordinary shares on deposit to be voted as follows: (a) in the event voting takes place at a shareholders’ meeting by show of hands, the depositary will instruct the custodian to vote, directly or by proxy, all Class A ordinary shares on deposit in accordance with the voting instructions received from a majority of the holders of ADSs who provided voting instructions; or (b) in the event voting takes place at a shareholders’ meeting by poll, the depositary will instruct the custodian to vote, directly or by proxy, the Class A ordinary shares on deposit in accordance with the voting instructions received from holders of ADSs.

In the event of voting by poll, holders of ADSs in respect of which no timely voting instructions have been received shall be deemed to have instructed the depositary to give a discretionary proxy to a person designated by us to vote the Class A ordinary shares represented by such holders’ ADSs; provided, that no such instruction shall be deemed given and no such discretionary proxy shall be given with respect to any matter as to which we inform the depositary that we do not wish such proxy to be given; provided, further, that no such discretionary proxy shall be given (x) with respect to any matter as to which we inform the depositary that (i) there exists substantial opposition, or (ii) the rights of holders of ADSs or the shareholders of the Company will be adversely affected and (y) in the event that the vote is on a show of hands.

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Please note that the ability of the depositary to carry out voting instructions may be limited by practical and legal limitations and the terms of the securities on deposit. We cannot assure you that you will receive voting materials in time to enable you to return voting instructions to the depositary in a timely manner.

In order to give you a reasonable opportunity to instruct the depositary as to the exercise of voting rights relating to deposited securities, if we request the depositary to act, pursuant to the deposit agreement, we will give the depositary notice of any such meeting and details concerning the matters to be voted upon at least 30 days in advance of the meeting date, although our post-IPO memorandum and articles of association only otherwise require an advance notice of at least 20 days.

Both shareholders and the depositary (or its proxy) acting on behalf of ADS holders have the option of voting in person or by proxy at a shareholders’ meeting.

Fees and Charges

As an ADS holder, you will be required to pay the following service fees to the depositary:

Service	Fees
•Issuance of ADSs	Up to $0.05 per ADS issued
•Cancellation of ADSs	Up to $0.05 per ADS canceled
•Distribution of cash dividends or other cash distributions	Up to $0.05 per ADS held
•Distribution of ADSs pursuant to stock dividends, free stock distributions or exercise of rights.	Up to $0.05 per ADS held
•Distribution of securities other than ADSs or rights to purchase additional ADSs	Up to $0.05 per ADS held
•Depositary services	Up to $0.05 per ADS held on the applicable record date(s) established by the depositary
•Transfer of ADRs	$1.50 per certificate presented for transfer

As an ADS holder you will also be responsible to pay certain fees and expenses incurred by the depositary and certain taxes and governmental charges such as:

Ÿ fees for the transfer and registration of Class A ordinary shares charged by the registrar and transfer agent for the Class A ordinary shares in the Cayman Islands (i.e., upon deposit and withdrawal of Class A ordinary shares);

Ÿ expenses incurred for converting foreign currency into U.S. dollars;

Ÿ expenses for cable, telex and fax transmissions and for delivery of securities;

Ÿ taxes and duties upon the transfer of securities (i.e., when Class A ordinary shares are deposited or withdrawn from deposit); and

Ÿ fees and expenses incurred in connection with the delivery or servicing of Class A ordinary shares on deposit.

Depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the depositary by the brokers (on behalf of their clients) receiving the newly issued ADSs from the depositary and by the brokers (on behalf of their clients) delivering the ADSs to the depositary for

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cancellation. The brokers in turn charge these fees to their clients. Depositary fees payable in connection with distributions of cash or securities to ADS holders and the depositary services fee are charged by the depositary to the holders of record of ADSs as of the applicable ADS record date.

The depositary fees payable for cash distributions are generally deducted from the cash being distributed. In the case of distributions other than cash (such as stock dividends and rights distributions), the depositary charges the applicable fee to the ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor (whether certificated or uncertificated in direct registration), the depositary sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian accounts (via DTC), the depositary generally collects its fees through the systems provided by DTC (whose nominee is the registered holder of the ADSs held in DTC) from the brokers and custodians holding ADSs in their DTC accounts. The brokers and custodians who hold their clients’ ADSs in DTC accounts in turn charge their clients’ accounts the amount of the fees paid to the depositary.

In the event of refusal to pay the depositary fees, the depositary may, under the terms of the deposit agreement, refuse the requested service until payment is received or may set off the amount of the depositary fees from any distribution to be made to the ADS holder.

Note that the fees and charges you may be required to pay may vary over time and may be changed by us and by the depositary. You will receive prior notice of such changes.

The depositary may reimburse us for certain expenses incurred by us in respect of the ADR program established pursuant to the deposit agreement, by making available a portion of the depositary fees charged in respect of the ADR program or otherwise, upon such terms and conditions as we and the depositary may agree from time to time. As described in the deposit agreement, we or the depositary may withhold or deduct from any distributions made in respect of Class A ordinary shares and may sell for the account of a holder any or all of the Class A ordinary shares and apply such distributions and sale proceeds in payment of any taxes (including applicable interest and penalties) or charges that are or may be payable by holders in respect of the ADSs.

Amendments and Termination

We may agree with the depositary to modify the deposit agreement at any time without your consent. We undertake to give holders 30 days’ prior notice of any modifications that would materially prejudice any of their substantial rights under the deposit agreement. We will not consider to be materially prejudicial to your substantial rights any modifications or supplements that are reasonably necessary for the ADSs to be registered under the Securities Act or to be eligible for book-entry settlement, in each case without imposing or increasing the fees and charges you are required to pay. In addition, we may not be able to provide you with prior notice of any modifications or supplements that are required to accommodate compliance with applicable provisions of law.

You will be bound by the modifications to the deposit agreement if you continue to hold your ADSs after the modifications to the deposit agreement become effective. The deposit agreement cannot be amended to prevent you from withdrawing the Class A ordinary shares represented by your ADSs (except as permitted by law).

We have the right to direct the depositary to terminate the deposit agreement. Similarly, the depositary may in certain circumstances on its own initiative terminate the deposit agreement. In either case, the depositary must give notice to the holders at least 30 days before termination. Until termination, your rights under the deposit agreement will be unaffected.

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After termination, the depositary will continue to collect distributions received (but will not distribute any such property until you request the cancellation of your ADSs) and may sell the securities held on deposit. After the sale, the depositary will hold the proceeds from such sale and any other funds then held for the holders of ADSs in a non-interest bearing account. At that point, the depositary will have no further obligations to holders other than to account for the funds then held for the holders of ADSs still outstanding (after deduction of applicable fees, taxes and expenses).

Books of Depositary

The depositary will maintain ADS holder records at its depositary office. You may inspect such records at such office during regular business hours but solely for the purpose of communicating with other holders in the interest of business matters relating to the ADSs and the deposit agreement.

The depositary will maintain facilities in New York to record and process the issuance, cancellation, combination, split-up and transfer of ADSs. These facilities may be closed from time to time, to the extent not prohibited by law.

Limitations on Obligations and Liabilities

The deposit agreement limits our obligations and the depositary’s obligations to you. It also limits our liability and the liability of the depositary. However, the limitations will not be effective to waive liabilities under the federal securities laws of the United States because any agreement to waive the requirements of the federal securities laws of the United States is void under Section 14 of the Securities Act. Please note the following:

Ÿ We and the depositary are obligated only to take the actions specifically stated in the deposit agreement without negligence or bad faith.

Ÿ The depositary disclaims any liability for any failure to carry out voting instructions, for any manner in which a vote is cast or for the effect of any vote, provided it acts in good faith and in accordance with the terms of the deposit agreement.

Ÿ The depositary disclaims any liability for any failure to determine the lawfulness or practicality of any action, for the content of any document forwarded to you on our behalf or for the accuracy of any translation of such a document, for the investment risks associated with investing in ordinary shares, for the validity or worth of the ordinary shares, for any tax consequences that result from the ownership of ADSs, for the credit-worthiness of any third party, for allowing any rights to lapse under the terms of the deposit agreement, for the timeliness of any of our notices or for any failure by us to give notice.

Ÿ We and the depositary will not be obligated to perform any act that is inconsistent with the terms of the deposit agreement.

Ÿ We and the depositary disclaim any liability if we or the depositary are prevented or forbidden from or subject to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the deposit agreement, by reason of any provision, present or future of any law or regulation, or by reason of present or future provision of any provision of our articles of association, or any provision of or governing the securities on deposit, or by reason of any act of God or war or other circumstances beyond our control.

Ÿ We and the depositary disclaim any liability by reason of any exercise of, or failure to exercise, any discretion provided for the deposit agreement or in our articles of association or in any provisions of or governing the securities on deposit.

Ÿ We and the depositary further disclaim any liability for any action or inaction in reliance on the advice or information received from legal counsel, accountants, any person presenting ordinary

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shares for deposit, any holder of ADSs or authorized representatives thereof, or any other person believed by either of us in good faith to be competent to give such advice or information.

Ÿ We and the depositary also disclaim liability for the inability of a holder to benefit from any distribution, offering, right or other benefit that is made available to holders of ordinary shares but is not, under the terms of the deposit agreement, made available to you.

Ÿ We and the depositary may rely without any liability upon any written notice, request or other document believed to be genuine and to have been signed or presented by the proper parties.

Ÿ We and the depositary also disclaim liability for any consequential or punitive damages for any breach of the terms of the deposit agreement.

Pre-Release Transactions

Subject to the terms and conditions of the deposit agreement, the depositary may issue to broker/dealers ADSs before receiving a deposit of Class A ordinary shares or release Class A ordinary shares to broker/dealers before receiving ADSs for cancellation. These transactions are commonly referred to as “pre-release transactions,” and are entered into between the depositary and the applicable broker/dealer. The deposit agreement limits the aggregate size of pre-release transactions (not to exceed 30% of the shares or deposit in the aggregate) and imposes a number of conditions on such transactions (i.e., the need to receive collateral, the type of collateral required, the representations required from brokers, etc.). The depositary may retain the compensation received from the pre-release transactions.

Taxes

You will be responsible for the taxes and other governmental charges payable on the ADSs and the securities represented by the ADSs. We, the depositary and the custodian may deduct from any distribution the taxes and governmental charges payable by holders and may sell any and all property on deposit to pay the taxes and governmental charges payable by holders. You will be liable for any deficiency if the sale proceeds do not cover the taxes that are due.

The depositary may refuse to issue ADSs, to deliver, transfer, split and combine ADRs or to release securities on deposit until all taxes and charges are paid by the applicable holder. The depositary and the custodian may take reasonable administrative actions to obtain tax refunds and reduced tax withholding for any distributions on your behalf. However, you may be required to provide to the depositary and to the custodian proof of taxpayer status and residence and such other information as the depositary and the custodian may require to fulfill legal obligations. You are required to indemnify us, the depositary and the custodian for any claims with respect to taxes based on any tax benefit obtained for you.

Foreign Currency Conversion

The depositary will arrange for the conversion of all foreign currency received into U.S. dollars if such conversion is practical, and it will distribute the U.S. dollars in accordance with the terms of the deposit agreement. You may have to pay fees and expenses incurred in converting foreign currency, such as fees and expenses incurred in complying with currency exchange controls and other governmental requirements.

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If the conversion of foreign currency is not practical or lawful, or if any required approvals are denied or not obtainable at a reasonable cost or within a reasonable period, the depositary may take the following actions in its discretion:

Ÿ Convert the foreign currency to the extent practical and lawful and distribute the U.S. dollars to the holders for whom the conversion and distribution is lawful and practical.

Ÿ Distribute the foreign currency to holders for whom the distribution is lawful and practical.

Ÿ Hold the foreign currency (without liability for interest) for the applicable holders.

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SHARES ELIGIBLE FOR FUTURE SALES

Upon completion of this offering, we will have                      ADSs outstanding, representing approximately     % of our outstanding ordinary shares, assuming the underwriters do not exercise their option to purchase additional ADSs. All of the ADSs sold in this offering will be freely transferable by persons other than by our “affiliates” without restriction or further registration under the Securities Act. Sales of substantial amounts of our ADSs in the public market could adversely affect prevailing market prices of our ADSs. Prior to this offering, there has been no public market for our ordinary shares or the ADSs, and although we will apply to list the ADSs on the NYSE, we cannot assure you that a regular trading market will develop for the ADSs. We do not expect that a trading market will develop for our ordinary shares not represented by the ADSs.

Lock-up Agreements

We have agreed that we will not offer, sell, contract to sell, pledge, grant any option to purchase, purchase any option or contract to sell, right or warrant to purchase, make any short sale, file a registration statement with respect to, or otherwise dispose of (including entering into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequence of ownership interests) any of our ADSs or ordinary shares or any securities that are convertible into or exchangeable for, or that represent the right to receive, our ADSs or ordinary shares or any substantially similar securities (other than pursuant to employee stock option plans existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date of this prospectus), without the prior written consent of the representatives of the underwriters for a period ending 180 days after the date of this prospectus. However, in the event that either (1) during the last 17 days of the “lock-up” period, we release earnings results or announce any material news or a material event or (2) prior to the expiration of the “lock-up” period, we announce, or if the representatives determine, that we will release earnings results during the 15-day period following the last day of the “lock-up” period, then in each case the “lock-up” period will be automatically extended until the expiration of the 18-day period beginning on the date of the release of the earnings results or the announcement of the material news or material event, as applicable, unless Goldman Sachs (Asia) L.L.C. waives, in writing, such an extension.

Each of our existing shareholders, executive officers, directors and certain of our option holders has agreed, subject to certain exceptions, not to offer, sell, contract to sell, pledge, grant any option to purchase, purchase any option or contract to sell, right or warrant to purchase, make any short sale, file a registration statement with respect to, or otherwise dispose of (including entering into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequence of ownership interests) any of our ADSs or ordinary shares or any securities that are convertible into or exchangeable for, or that represent the right to receive, our ADSs or ordinary shares or any substantially similar securities, without the prior written consent of Goldman Sachs (Asia) L.L.C. for a period ending 180 days after the date of this prospectus. The lock-up for our preferred shareholders party to the amended and restated shareholders’ agreement with us excludes ADSs that these shareholders may purchase in this offering or in open market transactions after the completion of this offering. In the event that either (1) during the last 17 days of the relevant “lock-up” period, we release earnings results or announce any material news or a material event or (2) prior to the expiration of the “lock-up” period, we announce, or if the representatives determine, that we will release earnings results during the 15-day period following the last day of the “lock-up” period, then in each case the “lock-up” period will be automatically extended until the expiration of the 18-day period beginning on the date of the release of the earnings results or the announcement of the material news or material event, as applicable, unless the representatives waive, in writing, such an extension. After the expiration of the 180-day period, the ordinary shares or ADSs held by our existing shareholders, executive officers, directors and option holders may be sold subject to the restrictions under Rule 144 under the Securities Act or by means of registered public offerings.

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In addition, through a letter agreement, we will instruct Citibank N.A., as depositary, not to accept any deposit of any ordinary shares or issue any ADSs for 180 days after the date of this prospectus unless we consent to such deposit or issuance, and not to provide consent without the prior written consent of Goldman Sachs (Asia) L.L.C. The foregoing does not affect the right of ADS holders to cancel their ADSs and withdraw the underlying ordinary shares. The 180-day lock-up period may be extended under the circumstances described in the paragraph immediately preceding this paragraph.

The shareholders of 1Verge Holdings Ltd., which will directly hold a total of 626,773,147 Class B ordinary shares of our company on an as-converted basis upon the completion of this offering, have agreed among themselves not to sell our shares through 1Verge Holdings Ltd. without the unanimous consent of 1Verge Holdings Ltd.’s board of directors for a period of two years after the completion of this offering.

Rule 144

All of our ordinary shares outstanding prior to this offering are “restricted securities” as that term is defined in Rule 144 under the Securities Act and may be sold publicly in the United States only if they are subject to an effective registration statement under the Securities Act or pursuant to an exemption from the registration requirement such as those provided by Rule 144 and Rule 701 promulgated under the Securities Act. In general, under Rule 144 as currently in effect, beginning 90 days after the date of this prospectus, a person (or persons whose shares are aggregated) who at the time of a sale is not, and has not been during the three months preceding the sale, an affiliate of us and has beneficially owned our restricted securities for at least six months will be entitled to sell the restricted securities without registration under the Securities Act, subject only to the availability of current public information about us, and will be entitled to sell restricted securities beneficially owned for at least one year without restriction. Persons who are our affiliates and have beneficially owned our restricted securities for at least six months may sell within any three-month period a number of restricted securities that does not exceed the greater of the following:

Ÿ 1% of the then outstanding ordinary shares, in the form of ADSs or otherwise, which will equal approximately              ordinary shares immediately after this offering, assuming the underwriters do not exercise their option to purchase additional ADSs; or

Ÿ the average weekly trading volume of our ordinary shares, in the form of ADSs or otherwise, during the four calendar weeks preceding the date on which notice of the sale is filed with the Securities and Exchange Commission.

Sales by our affiliates under Rule 144 are also subject to certain requirements relating to manner of sale, notice and the availability of current public information about us.

Rule 701

In general, under Rule 701 of the Securities Act as currently in effect, each of our employees, consultants or advisors who purchases our ordinary shares from us in connection with a compensatory stock plan or other written agreement executed prior to the completion of this offering is eligible to resell such ordinary shares in reliance on Rule 144, but without compliance with some of the restrictions, including the holding period, contained in Rule 144. However, the Rule 701 shares would remain subject to lock-up arrangements and would only become eligible for sale when the lock-up period expires.

Registration Rights

Upon completion of this offering, certain holders of our ordinary shares or their transferees will be entitled to request that we register their shares under the Securities Act, following the expiration of the lock-up agreements described above. See “Description of Share Capital—Registration Rights.”

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TAXATION

The following summary of the material Cayman Islands, PRC and United States federal income tax consequences of an investment in our ADSs or ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in our ADSs or ordinary shares, such as the tax consequences under U.S. state, local and other tax laws. To the extent that the discussion relates to matters of Cayman Islands tax law, it represents the opinion of Appleby, our special Cayman Islands counsel; to the extent it relates to PRC tax law, it is the opinion of TransAsia Lawyers, our special PRC counsel; and to the extent that the discussion states definitive legal conclusions under United States federal income tax law as to the material U.S. federal income tax consequences of an investment in our ADSs or ordinary shares, and subject to the qualifications herein, it represents the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, our special United States counsel.

Cayman Islands Taxation

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or brought within the jurisdiction of the Cayman Islands. There are no exchange control regulations or currency restrictions in the Cayman Islands.

In addition, because we are a Cayman Islands exempted company, we have the ability to apply for a tax exemption undertaking certificate from the Cayman Islands Governor in Council, whereby for a twenty-year period from the date of grant, no law which is enacted in the Cayman Islands imposing any taxes to be levied on the profits and income or gains or appreciation of a company shall apply to us or our operations. We intend to apply for such certificate prior to the end of 2010.

People’s Republic of China Taxation

We are a holding company incorporated in the Cayman Islands, which holds 100% of our equity interests in our PRC subsidiaries either directly, or indirectly through our Hong Kong subsidiary. Our business operations are principally conducted through our PRC subsidiaries. The New EIT Law and its implementation rules, both of which became effective on January 1, 2008, provide that China-sourced income of foreign enterprises, such as dividends paid by a PRC subsidiary to its overseas parent that is not a PRC resident enterprise and has no establishment in the PRC, will normally be subject to PRC withholding tax at a rate of 10%, unless there are applicable treaties that reduce such rate. Under the Arrangement between the PRC and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and Capital, such dividend withholding tax rate is reduced to 5% if a Hong Kong resident enterprise owns over 25% of the PRC company distributing the dividends. As our Hong Kong subsidiary owns 100% of Jet Brilliant Beijing, under the aforesaid arrangement, any dividends that Jet Brilliant Beijing pays our Hong Kong subsidiary may be subject to a withholding tax at the rate of 5% if our Hong Kong subsidiary is not considered to be a PRC tax resident enterprise as described below or a non-PRC tax resident enterprise with an establishment in the PRC and whose dividend income has a connection with such establishment. However, if our Hong Kong subsidiary is not considered to be the beneficial owner of such dividends under SAT Circular 601, such dividends would be subject to the withholding tax rate of 10%. See “Regulation—Regulations on Tax—Dividend Withholding Tax.”

Under the New EIT Law, enterprises established under the laws of jurisdictions outside China with their “de facto management bodies” located within China may be considered to be PRC tax

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resident enterprises for tax purposes. If we are considered a PRC tax resident enterprise under the above definition, then our global income will be subject to PRC enterprise income tax at the rate of 25%.

The implementation rules of the New EIT Law provide that (i) if the enterprise that distributes dividends is domiciled in the PRC, or (ii) if gains are realized from transferring equity interests of enterprises domiciled in the PRC, then such dividends or capital gains are treated as China-sourced income. It is not clear how “domicile” may be interpreted under the New EIT, and it may be interpreted as the jurisdiction where the enterprise is a tax resident. Therefore, if we are considered as a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders or ADS holders as well as gains realized by such shareholders or ADS holders from the transfer of our shares or ADSs may be regarded as China-sourced income and as a result become subject to PRC withholding tax at a rate of up to 10%.

See “Risk Factors—Risks Related to Doing Business in China—Our global income and the dividends that we may receive from our PRC subsidiaries may be subject to PRC taxes under the PRC Enterprise Income Tax Law, which would have a material adverse effect on our results of operations.”

Material United States Federal Income Tax Considerations

The following is a summary of the material United States federal income tax considerations relating to the acquisition, ownership and disposition of our ADSs or ordinary shares by a U.S. Holder (as defined below) that will acquire our ADSs or ordinary shares in the offering and will hold our ADSs or ordinary shares as “capital assets” (generally, property held for investment) under the United States Internal Revenue Code of 1986, as amended, or the Code. This summary is based upon existing United States federal tax law, including the Code, its legislative history, existing, temporary and proposed regulations thereunder, published rulings and court decisions, all of which are subject to differing interpretations or change, possibly with retroactive effect. No ruling has been sought from the IRS with respect to any United States federal income tax consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. This summary does not discuss all aspects of United States federal income taxation that may be important to particular investors in light of their individual investment circumstances, including investors subject to special tax rules for example, financial institutions, insurance companies, regulated investment companies, real estate investment trusts, broker-dealers, traders in securities that elect mark-to-market treatment, partnerships (or other entities treated as partnerships for United States federal income tax purposes) and their partners and tax-exempt organizations (including private foundations), holders who are not U.S. Holders, holders who own (directly, indirectly or constructively) 10% or more of our voting stock except as otherwise indicated, holders who acquire their ADSs or ordinary shares pursuant to any employee share option or otherwise as compensation, investors that will hold their ADSs or ordinary shares as part of a straddle, hedge, conversion, constructive sale or other integrated transaction for United States federal income tax purposes, or investors that have a functional currency other than the United States dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this summary does not discuss any United States federal estate, gift or alternative minimum tax consequences or any non-United States (except for the cross-references below to the New PRC EIT Law and potential PRC taxes), state or local tax considerations. Each U.S. Holder is urged to consult its tax advisor regarding the United States federal, state, local and non-United States income and other tax considerations of an investment in our ADSs or ordinary shares.

General

For purposes of this summary, a “U.S. Holder” is a beneficial owner of our ADSs or ordinary shares that is, for United States federal income tax purposes, (i) an individual who is a citizen or

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resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes) created in, or organized under the law of, the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise validly elected to be treated as a United States person under the Code.

If a partnership (or other entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of our ADSs or ordinary shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. If a U.S. Holder is a partner of a partnership holding our ADSs or ordinary shares, the U.S. Holder is urged to consult its tax advisor regarding an investment in our ADSs or ordinary shares.

The discussion below assumes that the representations contained in the deposit agreement are true and that the obligations in the deposit agreement and any related agreement have been and will be complied with in accordance with the terms.

For United States federal income tax purposes, a U.S. Holder of ADSs will be treated as the beneficial owner of the underlying shares represented by the ADSs. Accordingly, deposits or withdrawals of ordinary shares for ADSs will not be subject to United States federal income tax.

Passive Foreign Investment Company Considerations

A non-United States corporation, such as our company, will be treated as a “passive foreign investment company,” or PFIC, for United States federal income tax purposes for any taxable year, if either (i) 75% or more of its gross income for such year consists of certain types of “passive” income, or (ii) 50% or more of the value of its assets (determined on the basis of a quarterly average) during such year produce or are held for the production of passive income, or the asset test. For this purpose, cash and assets readily convertible into cash are categorized as a passive asset and the company’s goodwill and other unbooked intangibles are taken into account. However, where the PFIC is a CFC (as defined below) the stock of which is not publicly traded on the last day of each quarter of the taxable year, such a PFIC is required to measure its assets using adjusted basis, rather than fair market value, in applying the asset test, thereby preventing the inclusion of the value of the PFIC’s goodwill and other unbooked intangibles in the asset test, because such assets generally have no tax basis. Passive income is any income that would be foreign personal holding company income under the Code, including, without limitation, dividends, interest, royalties, rents, annuities, net gains from the sale or exchange of property producing such income, net gains from commodity transactions, net foreign currency gains and income from notional principal contracts. We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, more than 25% (by value) of the stock.

Although the law in this regard is unclear, we treat 1Verge Information and Jiaheyi as being owned by us for United States federal income tax purposes, not only because we exercise effective control over the operation of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we consolidate their results of operations in our consolidated financial statements. If it were determined, however, that we are not the owner of the above entities for the Unites States federal income tax purposes, we would likely be treated as a PFIC for our current taxable year and any subsequent taxable year.

Assuming that we are the owner of 1Verge Information and Jiaheyi for United States federal income tax purposes, we primarily operate as a provider of online video content and advertising

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services. We are likely treated as a CFC and a PFIC for U.S. federal income tax purposes for our taxable year that includes this offering. If we are so classified, our ADSs or ordinary shares generally will continue to be treated as shares in a PFIC for all succeeding years during which a U.S. Holder holds our ADSs or ordinary shares, unless we cease to be a PFIC (as is expected for 2011 and subsequent taxable years) and the U.S. Holder makes a “deemed sale” or “deemed dividend” election with respect to the ADSs or ordinary shares. If you make a “deemed sale” election, you will be deemed to have sold the ADSs or ordinary shares you hold at their fair market value as of the last day of the last year during which we were a PFIC (the “termination date”). If you make a “deemed dividend” election, you will be required to include in income as a deemed dividend your pro-rata share of our earnings and profits accumulated during any portion of your holding period ending at the close of the termination date and attributable to the ADSs or ordinary shares held on the termination date. Any gain from such deemed sale or any deemed dividend would be subject to the consequences described below under “Passive Foreign Investment Company Rules.” Because we have never earned a profit and do not expect to achieve profitability (as determined for financial reporting purposes) in 2010, the deemed dividend election may not to have any adverse US income federal tax effect on you. Financial reporting accounting is different, however, from the computation of net income and earnings and profits under the Code. You are urged to consult your tax adviser regarding the deemed dividend and deemed sale elections.

Although the law in this area is in many instances unclear, based on our current income and assets and projections as to the value of our ADSs and outstanding ordinary shares pursuant to this offering, we do not expect to be treated as a PFIC for our 2011 taxable year or the foreseeable future. Therefore, if you make a “deemed sale” or “deemed dividend” election, your ADSs or ordinary shares with respect to which such election was made should not be treated as shares in a PFIC unless we subsequently become a PFIC. While we do not anticipate continuing being a PFIC in 2011, because the value of our assets for purposes of the asset test will generally be determined by reference to the market price of our ADSs or ordinary shares, fluctuations in the market price of our ADSs or ordinary shares may cause us to continue being a PFIC for 2011 or subsequent taxable years. In estimating the value of our goodwill and other unbooked intangibles, we have taken into account our anticipated market capitalization following the close of this offering. Among other matters, if our market capitalization is less than anticipated or subsequently declines, we may continue to be treated as a PFIC for one or more future taxable years. We expect to file annual reports on Form 20-F with the U.S. Securities and Exchange Commission in which we will update our expectations as to whether or not we anticipate being a PFIC for such year.

The composition of our income and our assets will also be affected by (i) future growth in activities that may potentially produce passive income, and (ii) how, and how quickly, we spend our liquid assets and the cash raised in this offering. Under circumstances where revenues from activities that produce passive income significantly increase relative to our revenues from activities that produce non-passive income or where we determine not to deploy significant amounts of cash for active purposes, our risk of continuing to be treated as a PFIC for 2011 or subsequent taxable years may substantially increase.

Furthermore, because there are uncertainties in the application of the relevant rules, it is possible that the IRS may successfully challenge our classification of certain income and assets as non-passive, which may result in our company continuing to be treated as a PFIC for 2011 or subsequent taxable years. Because PFIC status is a fact-intensive determination made on an annual basis and will depend upon the composition of our assets and income, and the value of our tangible and intangible assets from time to time, no assurance can be given that we will not continue to be treated as a PFIC for 2011 or subsequent taxable years.

The discussion below under “Dividends” and “Sale or Other Disposition of ADSs or Ordinary Shares” is written to the extent that we will not be treated as a PFIC for United States federal income

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tax purposes. The United States federal income tax rules that apply if we are treated as a PFIC for our 2010 or subsequent taxable years are generally discussed below under “Passive Foreign Investment Company Rules.”

Dividends

Subject to the discussion below under “Passive Foreign Investment Company Rules,” any cash distributions (including the amount of any PRC tax withheld) paid on our ADSs or ordinary shares out of our current or accumulated earnings and profits, as determined under United States federal income tax principles, will generally be includible in the gross income of a U.S. Holder as dividend income on the day actually or constructively received by the U.S. Holder, in the case of ordinary shares, or by the depositary, in the case of ADSs. Because we do not intend to determine our earnings and profits on the basis of United States federal income tax principles, any distribution paid will generally be treated as a “dividend” for United States federal income tax purposes. For taxable years beginning before January 1, 2011, a non-corporate recipient of dividend income generally will be subject to tax on dividend income from a “qualified foreign corporation” at a maximum United States federal tax rate of 15 percent rather than the marginal tax rates generally applicable to ordinary income provided that certain holding period requirements are met. A non-United States corporation (other than a corporation that is treated as a PFIC for the taxable year in which the dividend is paid or the preceding taxable year) generally will be considered to be a qualified foreign corporation (i) if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information program, or (ii) with respect to any dividend it pays on stock (or ADSs in respect of such stock) which is readily tradable on an established securities market in the United States. We will apply list the ADSs on the NYSE. Provided the listing is approved on the NYSE, which is an established securities market in the United States, the ADSs are expected to be readily tradable. Thus, we believe that dividends we pay on our ADSs will meet the conditions required for the reduced tax rates. Since we do not expect that our ordinary shares will be listed on an established securities market, we do not believe that dividends we pay on our ordinary shares that are not represented by ADSs will meet the conditions required for these reduced tax rates. Dividends received on our ADSs or ordinary shares will not be eligible for the dividend received deduction allowed to corporations.

In the event that we are deemed to be a PRC resident enterprise under the New EIT Law, a U.S. Holder may be subject to PRC withholding taxes on dividends paid on our ADSs or ordinary shares. We may, however, be eligible for the benefits of the United States-PRC income tax treaty. If we are eligible for such benefits, we may be considered to be a qualified foreign corporation, as defined above, and therefore, dividends we pay on our ordinary shares, regardless of whether such shares are represented by the ADSs, would be eligible for the reduced rates of taxation applicable to qualified dividend income, as discussed above.

Dividends generally will be treated as income from foreign sources for United States foreign tax credit purposes and generally will constitute passive category income. Depending on the U.S. Holder’s individual facts and circumstances, the U.S. Holder may be eligible to claim a foreign tax credit in respect of any foreign withholding taxes imposed on dividends received on our ADSs or ordinary shares. A U.S. Holder who does not elect to claim a foreign tax credit for foreign tax withheld, may instead claim a deduction, for United States federal income tax purposes, in respect of such withholdings, but only for a year in which such holder elects to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are complex and their outcome depends in large part on the U.S. Holder’s individual facts and circumstances. Accordingly, U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

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Sale or Other Disposition of ADSs or Ordinary Shares

Subject to the discussion below under “Passive Foreign Investment Company Rules,” a U.S. Holder will generally recognize capital gain or loss upon the sale or other disposition of ADSs or ordinary shares in an amount equal to the difference between the amount realized upon the disposition and the holder’s adjusted tax basis in such ADSs or ordinary shares. Any capital gain or loss will be long-term if the ADSs or ordinary shares have been held for more than one year and will generally be United States source gain or loss for United States foreign tax credit purposes. Capital gains of non-corporate taxpayers derived from capital assets held for more than one year are currently eligible for reduced rates of taxation. In the event that gain from the disposition of the ADSs or ordinary shares is subject to tax in the PRC, such gain may be treated as PRC source gain under the United States-PRC income tax treaty. Depending on the U.S. Holder’s individual facts and circumstances, the U.S. Holder may deduct capital loss (if any) upon the sale or other disposition of ADSs or ordinary shares. U.S. Holders are urged to consult their tax advisors regarding the tax consequences if a foreign withholding tax is imposed on a disposition of our ADSs or ordinary shares, including the availability of the foreign tax credit under their particular circumstances.

Passive Foreign Investment Company Rules

If we are treated as a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares, and unless the U.S. Holder makes a mark-to-market election (as described below), the U.S. Holder will generally be subject to special United States federal income tax rules that have a penalizing effect, regardless of whether we remain a PFIC, on (i) any excess distribution that we make to the U.S. Holder (which generally means any distribution paid during a taxable year to a U.S. Holder that is greater than 125 percent of the average annual distributions paid in the three preceding taxable years or, if shorter, the U.S. Holder’s holding period for the ADSs or ordinary shares), and (ii) any gain realized on the sale or other disposition, including a pledge, of ADSs or ordinary shares. Under the PFIC rules the:

Ÿ excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs or ordinary shares;

Ÿ amounts allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we are treated as a PFIC, or a pre-PFIC year, will be taxable as ordinary income;

Ÿ amounts allocated to each prior taxable year, other than the current taxable year or a pre-PFIC year, will be subject to tax at the highest tax rate in effect applicable to you for that year; and

Ÿ interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than the current taxable year or a pre-PFIC year.

If we are a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares and any of our non-United States subsidiaries is also a PFIC, such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of each such non-United States subsidiary classified as a PFIC (each such subsidiary, a lower-tier PFIC) for purposes of the application of these rules. U.S. Holders should consult their tax advisors regarding the application of the PFIC rules to any of our subsidiaries.

As an alternative to the foregoing rules, a U.S. Holder of “marketable stock” in a PFIC may make a mark-to-market election with respect to our ADSs, but not our ordinary shares, provided that the listing of the ADSs on the NYSE is approved and that the ADSs are regularly traded. We anticipate that our ADSs should qualify as being regularly traded, but no assurances may be given in this regard.

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If a U.S. Holder makes a valid mark-to-market election, the U.S. Holder will generally (i) include as ordinary income for each taxable year that we are a PFIC the excess, if any, of the fair market value of ADSs held at the end of the taxable year over the adjusted tax basis of such ADSs, and (ii) deduct as an ordinary loss the excess, if any, of the adjusted tax basis of the ADSs over the fair market value of such ADSs held at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. The U.S. Holder’s adjusted tax basis in the ADSs would be adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. Holder makes a mark-to-market election in respect of a corporation treated as a PFIC and such corporation ceases to be treated as a PFIC, the holder will not be required to take into account the gain or loss described above during any period that such corporation is not treated as a PFIC. If a U.S. Holder makes a mark-to-market election, any gain such U.S. Holder recognizes upon the sale or other disposition of our ADSs will be treated as ordinary income and any loss will be treated as ordinary loss, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. In the case of a U.S. Holder who has held ADSs or ordinary shares during any taxable year in respect of which we were treated as a PFIC and continues to hold such ADSs or ordinary shares (or any portion thereof), and who is considering making a mark-to-market election, special tax rules may apply relating to purging the PFIC taint of such ADSs or ordinary shares.

Because a mark-to-market election cannot be made for any lower-tier PFICs that we may own, a U.S. Holder may continue to be subject to the PFIC rules with respect to such U.S. Holder’s indirect interest in any investments held by us that are treated as an equity interest in a PFIC for United States federal income tax purposes.

Alternatively, U.S. Holders can sometimes avoid the rules described above by electing to treat us as a “qualified electing fund.” However, this option will not be available to U.S. Holders because we do not intend to comply with the requirements necessary to permit U.S. Holders to make this election.

If a U.S. Holder owns our ADSs or ordinary shares during any taxable year that we are a PFIC, the holder must file an annual IRS Form 8621 or such other form as is required by the United States Treasury Department. Each U.S. Holder is urged to consult its tax advisor concerning the United States federal income tax consequences of purchasing, holding and disposing ADSs or ordinary shares if we are or become treated as a PFIC, including the possibility of making a mark-to-market election “deemed sale” and “deemed dividend” elections and the unavailability of the election to treat us as a qualified electing fund.

Controlled Foreign Corporation Status and Related Tax Consequences

We are likely treated as a controlled foreign corporation, or CFC, for U.S. federal income tax purposes for our taxable year that includes this offering. We will be a CFC for any taxable year in which U.S. Holders that each is treated as owning (directly, indirectly or by attribution) at least 10% of our voting shares (each a “10% U.S. Holder”) together own more than 50% of the total combined voting power of all classes of our voting shares or more than 50% of the total value of our shares. Our classification as a CFC has many complex results, but one is that any U.S. Holder that is a 10% U.S. Holder on the last day of our taxable year would be required to recognize as ordinary income its pro rata share of “Subpart F Income” of the company and its subsidiaries (which, in the company’s case, should not generally include its subsidiaries’ operating income) for the taxable year, whether or not the U.S. Holder received any distributions on its ADSs or ordinary shares during that taxable year. For this purpose, Subpart F Income includes, without limitation, sales or services income that is generated outside of the CFC’s country of organization and that involves affiliates, dividends, interest, royalties, rent, annuities, net gains from the sale or exchange of property producing such income, net gains from commodity transactions, net foreign currency gains and income from notional principal contracts, and certain other income. In addition, special foreign tax credit rules would apply. The U.S. Holder’s

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adjusted tax basis in its ADSs or ordinary shares would be increased to reflect any taxed but undistributed earnings and profits. Any distribution of earnings and profits that previously had been taxed would result in a corresponding reduction in the U.S. Holder’s adjusted tax basis in its ADSs or ordinary shares and would not be taxed again when the U.S. Holder receives such distribution. Subject to a special limitation in the case of individual 10% U.S. Holders that have held their ADSs or ordinary shares for more than one year, if a U.S. Holder were a 10% U.S. Holder, any gain from disposition of its ADSs or ordinary shares would be treated as dividend income to the extent of accumulated earnings attributable to such ADSs or ordinary shares during the time the 10% U.S. Holder held such ADSs or ordinary shares. Each 10% U.S. Holder is urged to consult its tax advisors regarding the application of the CFC rules.

For any year in which we were both a PFIC and a CFC, if the U.S. Holder were a 10% U.S. Holder, the U.S. Holder would be subject to the CFC rules and not the PFIC rules with respect to its investment in ADSs or ordinary shares.

Information Reporting and Backup Withholding

Dividend payments with respect to the ADSs or ordinary shares and proceeds from the sale, exchange or redemption of the ADSs or ordinary shares may be subject to information reporting to the IRS and possible United States backup withholding, currently at a rate of 28%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes other required certifications, or who is otherwise exempt from backup withholding. U.S Holders that are required to establish their exempt status generally must provide such certification on IRS Form W-9. U.S. Holders should consult their tax advisors regarding the application of the United States information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder’s United States federal income tax liability, and a U.S. Holder generally may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the IRS and furnishing any required information.

Pursuant to the Hiring Incentives to Restore Employment Act enacted on March 18, 2010, in taxable years beginning after the date of enactment, an individual U.S. Holder and certain entities may be required to submit to the IRS certain information with respect to his or her beneficial ownership of the ADSs or ordinary shares, if such ADSs or ordinary shares are not held on his or her behalf by a financial institution. This new law also imposes penalties if an individual U.S. Holder is required to submit such information to the IRS and fails to do so.

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UNDERWRITING

We and the underwriters named below have entered into an underwriting agreement with respect to the ADSs being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of ADSs indicated in the following table. Goldman Sachs (Asia) L.L.C. is acting as the representative of the underwriters named below. Goldman Sachs (Asia) L.L.C.’s address is 68th Floor, Cheung Kong Center, 2 Queen’s Road Central, Hong Kong.

Underwriters	Number of ADSs
Goldman Sachs (Asia) L.L.C.
Allen & Company LLC
Pacific Crest Securities LLC
Piper Jaffray & Co.
Total

The underwriters are committed to take and pay for all of the ADSs being offered, if any are taken, other than the ADSs covered by the option described below unless and until this option is exercised.

If the underwriters sell more ADSs than the total number set forth in the table above, the underwriters have an option to buy up to an additional              ADSs from us. They may exercise that option for 30 days from the date of this prospectus. If any ADSs are purchased pursuant to this option, the underwriters will severally purchase ADSs in approximately the same proportion as set forth in the table above.

The following tables show the per ADS and total underwriting discounts and commissions to be paid to the underwriters by us. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase a total of              additional ADSs.

Paid by Us	No Exercise	Full Exercise
Per ADS	US$	US$
Total	US$	US$

ADSs sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any ADSs sold by the underwriters to securities dealers may be sold at a discount of up to US$             per ADS from the initial public offering price. If all the ADSs are not sold at the initial public offering price, the representative may change the offering price and the other selling terms. The offering of the ADSs by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.

Total expenses for this offering are estimated to be approximately US$             , including SEC registration fees of US$             , the Financial Industry Regulatory Authority, Inc. (formerly, the National Association of Securities Dealers, Inc.), or FINRA, filing fees of US$             , NYSE listing fee of US$             , printing expenses of approximately US$             , legal fees of approximately US$             , accounting fees of approximately US$             , roadshow costs and expenses of approximately US$             , and travel and other out-of-pocket expenses of approximately US$             . All amounts are estimated except for the fees relating to SEC registration, FINRA filing and NYSE listing. The offering of the ADSs by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.

We have agreed with the underwriters not to, without the prior consent of the representative, for a period of 180 days following the date of this prospectus, offer, sell, contract to sell, pledge, grant any

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option to purchase, purchase any option or contract to sell, right or warrant to purchase, make any short sale, file a registration statement with respect to, or otherwise dispose of (including entering into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequence of ownership interests) any of our ADSs or ordinary shares or any securities that are convertible into or exchangeable for, or that represent the right to receive, our ADSs or ordinary shares or any substantially similar securities (other than pursuant to employee stock option plans existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date of this prospectus). We have also agreed to cause our subsidiaries and controlled affiliates to abide by the restrictions of the lock-up agreement. In addition, all of our shareholders, all of our directors and executive officers and certain of our option holders have entered into a similar 180-day lock-up agreement with respect to our ADSs or ordinary shares or any securities that are convertible into or exchangeable for, or that represent the right to receive, our ADSs or ordinary shares or any substantially similar securities. The lock-up agreements with our preferred shareholders exclude ADSs that these shareholders may purchase in this offering or in open market transactions after the completion of this offering.

The 180-day restricted period described in the preceding paragraph will be automatically extended if: (1) during the last 17 days of the 180-day restricted period, we issue an earnings release or announce material news or a material event; or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 15-day period following the last day of the 180-day period, in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the announcement of the material news or event, as applicable.

In addition, through a letter agreement, we will instruct Citibank N.A., as depositary, not to accept any deposit of any ordinary shares or issue any ADSs for 180 days after the date of this prospectus unless we consent to such deposit or issuance, and not to provide consent without the prior written consent of Goldman Sachs (Asia) L.L.C. The foregoing does not affect the right of ADS holders to cancel their ADSs and withdraw the underlying ordinary shares. The 180-day lock-up period may be extended under the circumstances described in the paragraph immediately preceding this paragraph.

Prior to the offering, there has been no public market for our ADSs or ordinary shares. The initial public offering price of the ADSs has been negotiated between us and the representative.

Among the factors to be considered in determining the initial public offering price of the ADSs, in addition to prevailing market conditions, will be our historical performance, estimates of our business potential and earnings prospects, an assessment of our management and the consideration of the above factors in relation to market valuation of companies in related businesses.

We will apply to list our ADSs on the NYSE under the symbol “YOKU.”

In connection with the offering, the underwriters may purchase and sell ADSs in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of ADSs than they are required to purchase in the offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional ADSs from us in the offering. The underwriters may close out any covered short position by either exercising their option to purchase additional ADSs or purchasing ADSs in the open market. In determining the source of ADSs to close out the covered short position, the underwriters will consider, among other things, the price of ADSs available for purchase in the open market as compared to the price at which they may purchase additional ADSs pursuant to the option granted to them. “Naked” short sales are any sales in excess of

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such option. The underwriters must close out any naked short position by purchasing ADSs in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the ADSs in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for, or purchases of, ADSs made by the underwriters in the open market prior to the completion of the offering.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representative has repurchased ADSs sold by, or for the account of, such underwriter in stabilizing or short covering transactions.

Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the ADSs, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of the ADSs. As a result, the price of the ADSs may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they are required to be conducted in accordance with applicable laws and regulations, and they may be discontinued at any time. These transactions may be effected on the NYSE, the over-the-counter market or otherwise.

No action has been or will be taken by us or by any underwriter in any jurisdiction except in the United States that would permit a public offering of the ADSs, or the possession, circulation or distribution of a prospectus or any other material relating to us and the ADSs in any country or jurisdiction where action for that purpose is required. Accordingly, the ADSs may not be offered or sold, directly or indirectly, and neither this prospectus nor any other material or advertisements in connection with the ADSs may be distributed or published, in or from any country or jurisdiction except in compliance with any applicable laws, rules and regulations of any such country or jurisdiction.

A prospectus in electronic format will be made available on the websites maintained by one or more of the underwriters or one or more securities dealers. One or more of the underwriters may distribute prospectuses electronically. The underwriters may agree to allocate a number of ADSs for sale to their online brokerage account holders. ADSs to be sold pursuant to an Internet distribution will be allocated on the same basis as other allocations. In addition, ADSs may be sold by the underwriters to securities dealers who resell ADSs to online brokerage account holders.

This prospectus may be used by the underwriters and other dealers in connection with offers and sales of the ADSs, including the ADSs initially sold by the underwriters in the offering being made outside of the United States, to persons located in the United States.

This prospectus does not constitute a public offer of the ADSs or ordinary shares, whether by way of sale or subscription, in the Cayman Islands. Each underwriter may not offer or sell, directly or indirectly, any ADSs or ordinary shares in the Cayman Islands.

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date), an offer of the ADSs to the public may not be made in that Relevant Member State prior to the publication of a prospectus in relation to the ADSs which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the

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Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of the ADSs to the public in that Relevant Member State at any time,

(a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;

(c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the representative for any such offer; or

(d) in any other circumstances which do not require the publication by the company of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of ADSs to the public” in relation to any ADSs in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the ADSs to be offered so as to enable an investor to decide to purchase or subscribe the ADSs, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

Each underwriter has severally represented and agreed that:

(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the ADSs in circumstances in which Section 21(1) of the FSMA does not apply to us; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the ADSs in, from or otherwise involving the United Kingdom.

The ADSs may not be offered or sold to any investors in Switzerland other than on a non-public basis. This prospectus does not constitute a prospectus within the meaning of Article 652a and Art. 1156 of the Swiss Code of Obligations (Schweizerisches Obligationenrecht). Neither this offering nor the ADSs have been or will be approved by any Swiss regulatory authority.

The ADSs may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the ADSs may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to ADSs which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the

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offer or sale, or invitation for subscription or purchase, of the ADSs may not be circulated or distributed, nor may the ADSs be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the ADSs are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.

The ADSs have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the Financial Instruments and Exchange Law) and each underwriter has agreed that it will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

This prospectus may not be circulated or distributed in the PRC and the ADSs may not be offered or sold, and will not be offered or sold to any person for re-offering or resale, directly or indirectly, to any resident of the PRC except pursuant to applicable laws and regulations of the PRC. For the purpose of this paragraph, PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau.

The ADSs have not been offered or sold, and will not be offered or sold, directly or indirectly, in the United Arab Emirates, except: (1) in compliance with all applicable laws and regulations of the United Arab Emirates; and (2) through persons or corporate entities authorized and licensed to provide investment advice and/or engage in brokerage activity and/or trade in respect of foreign securities in the United Arab Emirates. The information contained in this prospectus does not constitute a public offer of securities in the United Arab Emirates in accordance with the Commercial Companies Law (Federal Law No. 8 of 1984 (as amended)) or otherwise and is not intended to be a public offer and is addressed only to persons who are sophisticated investors.

Some of the underwriters are expected to make offers and sales both in and outside the United States through their respective selling agents. Any offers and sales in the United States will be conducted by broker-dealers registered with the SEC. Goldman Sachs (Asia) L.L.C. is expected to make offers and sales in the United States through its selling agent, Goldman, Sachs & Co.

The underwriters do not expect sales to discretionary accounts to exceed five percent of the total number of ADSs offered.

We have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act.

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We currently anticipate that we will undertake a directed share program pursuant to which we will direct the underwriters to reserve up to              ADSs for sale at the initial public offering price to directors, officers, employees, business associates and related persons through a directed share program. The number of ADSs available for sale to the general public in the public offering will be reduced to the extent these persons purchase any reserved ADSs. Any ADSs not so purchased will be offered by the underwriters to the general public on the same basis as the other ADSs offered hereby.

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. Certain of the underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for the issuer, for which they received or will receive customary fees and expenses.

In the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the issuer.

Goldman Sachs (Asia) L.L.C. is acting as sole global coordinator and sole bookrunner for this offering.

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LEGAL MATTERS

We are being represented by Skadden, Arps, Slate, Meagher & Flom LLP with respect to certain legal matters as to United States federal securities and New York State law. The underwriters are being represented by Simpson Thacher & Bartlett LLP with respect to certain legal matters as to United States federal securities and New York State law. The validity of the ordinary shares represented by the ADSs offered in this offering will be passed upon for us by Appleby. Certain legal matters as to PRC law will be passed upon for us by TransAsia Lawyers and for the underwriters by Haiwen & Partners. Skadden, Arps, Slate, Meagher & Flom LLP may rely upon Appleby with respect to matters governed by Cayman Islands law and TransAsia Lawyers with respect to matters governed by PRC law. Simpson Thacher & Bartlett LLP may rely upon Haiwen & Partners with respect to matters governed by PRC law.

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EXPERTS

Our consolidated financial statements as of December 31, 2008 and 2009 and for each of the three years ended December 31, 2009 included in this prospectus have been audited by Ernst & Young Hua Ming, an independent registered public accounting firm, as set forth in their report appearing herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The offices of Ernst & Young Hua Ming are located at Level 16, Ernst & Young Tower, Tower E3, Oriental Plaza, No. 1 East Chang An Ave, Dong Cheng District, Beijing, China 100738.

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ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission, or the SEC, a registration statement on Form F-1, including relevant exhibits under the Securities Act with respect to underlying ordinary shares represented by the ADSs to be sold in this offering. We have also filed with the SEC a related registration statement on F-6 to register the ADSs. This prospectus, which constitutes a part of the registration statement, does not contain all of the information contained in the registration statement. You should read the registration statement on Form F-1 and its exhibits and schedules for further information with respect to us and our ADSs.

Immediately upon the effectiveness of the registration statement we will become subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we will be required to file reports, including annual reports on Form 20-F, and other information with the SEC. For the fiscal year ending December 31, 2010, our annual report on Form 20-F will be due within six months following the end of such fiscal year. For fiscal years ending on or after December 15, 2011, we will be required to file our annual report on Form 20-F within 120 days after the end of each fiscal year. All information filed with the SEC can be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. You may also obtain additional information over the Internet at the SEC’s website at www.sec.gov.

As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing the furnishing and content of proxy statements to shareholders, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we intend to furnish the depositary with our annual reports, which will include a review of operations and annual audited consolidated financial statements prepared in conformity with U.S. GAAP, and all notices of shareholders’ meeting and other reports and communications that are made generally available to our shareholders. The depositary will make such notices, reports and communications available to holders of ADSs and, upon our written request, will mail to all record holders of ADSs the information contained in any notice of a shareholders’ meeting received by the depositary from us.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of December 31, 2008 and 2009		F-3-F-4
Consolidated Statements of Operations for the Years Ended December 31, 2007, 2008 and 2009		F-5
Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Years Ended December  31, 2007, 2008 and 2009		F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2008 and 2009		F-7
Notes to the Consolidated Financial Statements for the Years Ended December 31, 2007, 2008 and 2009		F-8-F-42

INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Page
Condensed Consolidated Balance Sheets as of December 31, 2009 and September 30, 2010 (Unaudited)		F-43-F-45
Unaudited Interim Condensed Consolidated Statements of Operations for the Nine Months Ended September  30, 2009 and 2010		F-46
Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Nine Months Ended September 30, 2009 and 2010		F-47
Unaudited Interim Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September  30, 2009 and 2010		F-48-F-49
Notes to the Unaudited Interim Condensed Consolidated Financial Statements for the Nine Months Ended September  30, 2009 and 2010		F-50-F-65

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of

Youku.com Inc.

We have audited the accompanying consolidated balance sheets of Youku.com Inc. (the “Company”) as of December 31, 2009 and 2008, and the related consolidated statements of operations, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Youku.com Inc. at December 31, 2009 and 2008, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young Hua Ming

Beijing, People’s Republic of China

August 20, 2010

F-2

YOUKU.COM INC.

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2008 AND 2009

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

			As of December 31,
	Notes		2008		2009		2009		2009	2009
			RMB		RMB		US$		RMB	US$
									Unaudited pro forma
									(Note 2)
ASSETS
Current assets:
Cash and cash equivalents				88,915		301,608		44,186
Short-term investments				115,366		—		—
Accounts receivable, net		3		20,939		74,960		10,982
Prepayments and other assets		4		3,380		7,754		1,136
Total current assets				228,600		384,322		56,304
Non-current assets:
Property and equipment, net		5		61,385		54,651		8,006
Prepayments and other assets		4		1,761		2,768		405
Total non-current assets				63,146		57,419		8,411
TOTAL ASSETS				291,746		441,741		64,715
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable				2,615		6,309		926
Advances from customers				759		3,210		470
Accrued expenses and other liabilities		6		33,375		91,573		13,417
Current portion of long-term debt		7		18,681		24,031		3,520
Warrant liability		12		4,729		7,356		1,078
Total current liabilities				60,159		132,479		19,411
Non-current liabilities:
Long-term debt		7		31,956		14,275		2,091
Total non-current liabilities				31,956		14,275		2,091
Total liabilities				92,115		146,754		21,502

F-3

YOUKU.COM INC.

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

			As of December 31,
	Notes		2008			2009			2009			2009			2009
			RMB			RMB			US$			RMB			US$
												Unaudited pro forma
												(Note 2)
Commitments and contingencies		11
Convertible redeemable preferred shares		13
Series A convertible redeemable preferred shares (“Series A Preferred Shares”) (US$0.00001 par value, 82,500,000 shares authorized, issued and outstanding as of December 31, 2008 and 2009; with aggregate amount of liquidation preference of US$3,000 for 2008 and 2009)				24,523			24,523			3,593			—			—
Series B convertible redeemable preferred shares (“Series B Preferred Shares”) (US$0.00001 par value, 278,700,000 shares authorized, issued and outstanding as of December 31, 2008 and 2009; with aggregate amount of liquidation preference of US$12,050 for 2008 and 2009)				94,248			94,248			13,807			—			—
Series C convertible redeemable preferred shares (“Series C Preferred Shares”) (US$0.00001 par value, 317,398,462 shares authorized as of December 31, 2008 and 2009, 308,770,154 shares issued and outstanding as of December 31, 2008 and 2009; with aggregate amount of liquidation preference of US$25,050 for 2008 and 2009)				183,998			183,998			26,956			—			—
Series D convertible redeemable preferred shares (“Series D Preferred Shares”) (US$0.00001 par value, 209,737,212 shares authorized, issued and outstanding as of December 31, 2008 and 2009; with aggregate amount of liquidation preference of US$30,000 for 2008 and 2009)				204,845			204,845			30,010			—			—
Series E convertible redeemable preferred shares (“Series E Preferred Shares”) (US$0.00001 par value, 209,849,890 shares authorized, issued and outstanding as of December 31, 2009; with aggregate amount of liquidation preference of US$40,050 for 2009)				—			272,985			39,992			—			—
Total convertible redeemable preferred shares				507,614			780,599			114,358			—			—
Youku.com Inc. shareholders’ equity (deficit):
Ordinary shares		14		30			30			4			110			16
Additional paid-in capital				7,769			12,473			1,826			792,992			116,172
Accumulated other comprehensive loss				(3,212	)		(3,259	)		(477	)		(3,259	)		(477	)
Accumulated deficit		15		(312,570	)		(494,856	)		(72,498	)		(494,856	)		(72,498	)
Total shareholders’ equity (deficit)				(307,983	)		(485,612	)		(71,145	)		294,987			43,213
TOTAL LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY				291,746			441,741			64,715

The accompanying notes are an integral part of the consolidated financial statements.

F-4

YOUKU.COM INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

			Years ended December 31,
	Notes		2007			2008			2009			2009
			RMB			RMB			RMB			US$
Net revenues				1,778			33,022			153,626			22,506
Cost of revenues		8		(46,148	)		(171,130	)		(216,708	)		(31,748	)
Gross loss				(44,370	)		(138,108	)		(63,082	)		(9,242	)
Operating expenses:
Product development				(15,530	)		(15,398	)		(20,908	)		(3,063	)
Sales and marketing				(22,469	)		(35,086	)		(72,746	)		(10,658	)
General and administrative				(5,843	)		(14,367	)		(18,523	)		(2,714	)
Total operating expenses				(43,842	)		(64,851	)		(112,177	)		(16,435	)
Loss from operations				(88,212	)		(202,959	)		(175,259	)		(25,677	)
Interest income		2		1,013			5,384			2,054			301
Interest expense		7		—			(4,240	)		(6,835	)		(1,001	)
Amortization of debt issuance costs				—			(2,380	)		—			—
Change in fair value of derivative financial liabilities and warrant liability		12		(2,422	)		(264	)		(2,313	)		(339	)
Others, net				(62	)		(1	)		67			10
Loss before income taxes				(89,683	)		(204,460	)		(182,286	)		(26,706	)
Income taxes		9		—			—			—			—
Net loss				(89,683	)		(204,460	)		(182,286	)		(26,706	)
Net loss per share, basic and diluted		16		(0.25	)		(0.56	)		(0.50	)		(0.07	)
Shares used in computation, basic and diluted		16		365,011,250			365,134,375			365,432,916			365,432,916
Pro forma net loss per share, basic and diluted (unaudited)		21								(0.13	)		(0.02	)
Shares used in pro forma net loss per share computation, basic and diluted (unaudited)		21								1,454,990,172			1,454,990,172

The accompanying notes are an integral part of the consolidated financial statements.

F-5

YOUKU.COM INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

	Number of ordinary shares		Ordinary shares		Additional paid-in capital		Accumulated other comprehensive loss			Retained earnings / (accumulated deficit)			Total shareholders’ equity (deficit)
			RMB		RMB		RMB			RMB			RMB
Balances at January 1, 2007		365,000,000		30		2,806		(430	)		(18,427	)		(16,021	)
Comprehensive loss:
Foreign currency translation adjustment								(1,741	)					(1,741	)
Net loss											(89,683	)		(89,683	)
Total comprehensive loss														(91,424	)
Exercise of stock options						25								25
Share-based compensation						1,249								1,249
Balances at December 31, 2007		365,000,000		30		4,080		(2,171	)		(108,110	)		(106,171	)
Comprehensive loss:
Foreign currency translation adjustment								(1,041	)					(1,041	)
Net loss											(204,460	)		(204,460	)
Total comprehensive loss														(205,501	)
Exercise of stock options						24								24
Share-based compensation						3,665								3,665
Balances at December 31, 2008		365,000,00		30		7,769		(3,212	)		(312,570	)		(307,983	)
Comprehensive loss:
Foreign currency translation adjustment								(47	)					(47	)
Net loss											(182,286	)		(182,286	)
Total comprehensive loss														(182,333	)
Exercise of stock options						139								139
Share-based compensation						4,565								4,565
Balances at December 31, 2009		365,000,000		30		12,473		(3,259	)		(494,856	)		(485,612	)
Balances at December 31, 2009, in US$				4		1,826		(477	)		(72,498	)		(71,145	)

The accompanying notes are an integral part of the consolidated financial statements.

F-6

YOUKU.COM INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

	Years ended December 31,
	2007			2008			2009			2009
	RMB			RMB			RMB			US$
Cash flows from operating activities:
Net loss		(89,683	)		(204,460	)		(182,286	)		(26,706	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		8,726			26,923			36,207			5,304
Bad debt expense		—			465			64			9
Amortization of debt issuance costs		—			2,380			—			—
Amortization of purchased copyright		—			1,450			4,581			671
Accretion of long-term debt discounts		—			591			1,001			147
Loss on disposal of property and equipment		47			26			44			6
Foreign exchange loss		—			1			—			—
Share-based compensation		1,249			3,665			4,565			669
Change in fair value of derivative financial liabilities and warrant liability		2,422			264			2,313			339
Changes in operating assets and liabilities:
Accounts receivable		(271	)		(21,133	)		(54,085	)		(7,923	)
Prepayments and other current assets		(4,068	)		(2,789	)		(8,807	)		(1,290	)
Accounts payable		(8,852	)		293			(4	)		—
Advances from customers		—			759			2,451			361
Accrued expenses and other liabilities		10,528			20,962			58,138			8,517
Net cash used in operating activities		(79,902	)		(170,603	)		(135,818	)		(19,896	)
Cash flows from investing activities:
Acquisition of property and equipment		(32,887	)		(49,110	)		(25,633	)		(3,755	)
(Purchase of) proceeds from short-term investments		(10,000	)		(104,000	)		114,000			16,701
Proceeds from disposal of property and equipment		7			25			—			—
Net cash (used in) provided by investing activities		(42,880	)		(153,085	)		88,367			12,946
Cash flows from financing activities:
Proceeds from issuance of Series B Preferred Shares		57,284			—			—			—
Proceeds from issuance of Series C Preferred Shares		185,117			—			—			—
Proceeds from issuance of Series D Preferred Shares		—			206,028			—			—
Proceeds from issuance of Series E Preferred Shares		—			—			273,413			40,055
Exercise of employee stock options		25			24			139			20
Drawdown of long-term debt		—			58,979			8,589			1,258
Principal repayments on long-term debt		—			(7,366	)		(21,548	)		(3,157	)
Debt commitment fee received (paid)		—			(31	)		26			4
Payment of convertible redeemable preferred shares issuance costs		(1,078	)		(1,744	)		(428	)		(63	)
Net cash provided by financing activities		241,348			255,890			260,191			38,117
Effect of exchange rate changes on cash and cash equivalents		(1,741	)		(1,042	)		(47	)		(7	)
Net increase (decrease) in cash and cash equivalents		116,825			(68,840	)		212,693			31,160
Cash and cash equivalents at beginning of the year		40,930			157,755			88,915			13,026
Cash and cash equivalents at end of the year		157,755			88,915			301,608			44,186
Supplemental disclosures of cash flow information:
Cash paid for interest		—			3,130			5,965			874
Purchases of property and equipment included in accounts payable		9,123			2,319			6,017			881

The accompanying notes are an integral part of the consolidated financial statements

F-7

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

1. ORGANIZATION AND BASIS OF PRESENTATION

Youku.com Inc. (the “Company”) was incorporated under the laws of the Cayman Islands on September 20, 2005. The Company was formerly known as 1Verge Inc. and changed its name to Youku.com Inc. on June 20, 2008.

As of December 31, 2007, 2008 and 2009, the Company has established one wholly owned subsidiary in the People’s Republic of China (“PRC”) and also consolidates two variable interest entities (“VIEs”), details of which are as follows:

	Place of Incorporation		Date of Establishment		Percentage of Ownership			Principal Activities
Subsidiary
1Verge Internet Technology (Beijing) Co., Ltd. (“1Verge Internet”)		PRC		November 14, 2005		100	%	Provision of general and administrative services to group companies
VIEs
1Verge Information Technology (Beijing) Co., Ltd. (“1Verge Information”)		PRC		February 24, 2006		Nil		Online video sharing and distribution services, online advertising services, and mobile value added services
Jiaheyi Advertising (Beijing) Co., Ltd. (“Jiaheyi Advertising”)		PRC		March 9, 2006		Nil		Online video sharing, and distribution services, online advertising services

In August 2006, 1Verge Internet injected additional capital into 1Verge Information through Jiaheyi Advertising. Subsequent to this capital injection, Jiaheyi Advertising became the majority shareholder, which held 90% of the total shares of 1Verge Information.

In May 2008, 1Verge Internet further injected additional capital into 1Verge Information through Jiaheyi Advertising. Subsequent to this capital injection, Jiaheyi Advertising held 95% of the total shares of 1Verge Information.

The Company, its subsidiary and VIEs are hereinafter collectively referred to as the “Group”.

The Group provides online video sharing and distribution services, online advertising services and mobile value added services through its internet site, www.youku.com. The Group’s principal geographic market is in the PRC. The Company does not conduct any substantive operations of its own but conducts its primary business operations through its wholly owned subsidiary and VIEs in the PRC.

PRC laws and regulations prohibit or restrict foreign ownership of Internet content and advertising businesses. To comply with these foreign ownership restrictions, the Group operates its websites and

F-8

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

provides online advertising services in the PRC through VIEs, the PRC legal entities that were established by individuals authorized by the Group. The paid-in capital of the VIEs was funded by the Group through loans extended to the authorized individuals. The Company has entered into business operation, pledge, loan, share option, exclusive technical and consulting, domain name license and trademark license agreements (the “Contractual Agreements”) with the VIEs through 1Verge Internet, which obligate 1Verge Internet to absorb a majority of the expected losses from the VIEs’ activities and entitles 1Verge Internet to receive a majority of residual returns from the VIEs. Through these aforementioned agreements, the Company maintains the ability to approve decisions made by the VIEs, and ability to acquire the equity interests in the VIEs when permitted by the PRC laws via 1Verge Internet.

As a result of the Contractual Agreements, the Company consolidates the VIEs as required by Accounting Standards Codification (“ASC”) subtopic 810-10, Consolidation: Overall (Pre-Codification: Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 46R, Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51).

The aggregate carrying amount of the total assets and total liabilities of the VIEs as of December 31, 2009 were RMB173,851 (US$25,469) and RMB534,594 (US$78,318), respectively. There was no pledge or collateralization of the VIEs’ assets. Creditors of the VIEs have no recourse to the general credit of 1Verge Internet, which is the primary beneficiary of the VIEs. The amounts of the net liabilities of VIEs as of December 31, 2009 were RMB360,743 (US$52,849). In addition, the Group has provided financial support amounting to RMB457,101 and RMB440,313 (US$64,506) that it was not previously contractually required to provide as at December 31, 2008 and 2009, respectively.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The consolidated financial statements of the Group include the financial statements of the Company, its subsidiary and VIEs in which it has a controlling financial interest. The results of the subsidiary are consolidated from the date on which the Group obtained control and continue to be consolidated until the date that such control ceases. A controlling financial interest is typically determined when a company holds a majority of the voting equity interest in an entity. However, if the company demonstrates its ability to control the VIEs through its rights to all the residual benefits of the VIEs and its obligation to fund losses of the VIEs then the entity is consolidated. All significant intercompany balances and transactions between the Company, its subsidiary and VIEs have been eliminated in consolidation.

Use of estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Management evaluates estimates, including those related to the accounts receivable allowances, recoverability and useful lives of long-lived assets, fair values of options to purchase the Company’s ordinary shares, and deferred tax

F-9

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

valuation allowance, among others. Management bases the estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates.

Convenience translation

Translations of amounts from Renminbi (“RMB”) into United States dollars for the convenience of the reader were calculated at the noon buying rate of US$1.00 to RMB6.8259 on December 31, 2009 in the city of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into United States dollars at such rate.

Foreign currency translation and transactions

The Company’s functional currency is the US$. The Company’s subsidiary and VIEs determined their functional currencies to be the RMB, which is their respective local currency based on the criteria of ASC subtopic 830-10, Foreign Currency Matters: Overall (Pre-Codification: FASB No. 52, Foreign Currency Translation). The Company uses the monthly average exchange rate for the year and the exchange rate at the balance sheet date to translate the operating results and financial position, respectively. Translation differences are recorded in accumulated other comprehensive loss, a component of shareholders’ equity (deficit). The Company uses the RMB as its reporting currency.

Transactions denominated in foreign currencies are remeasured into the functional currency at the exchange rates prevailing on the transaction dates. Financial assets and liabilities denominated in foreign currencies are remeasured into the functional currency at the exchange rates prevailing at the balance sheet date. Exchange gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations.

Fair value of financial instruments

Financial instruments include cash and cash equivalents, short-term investments, accounts receivable, accounts payable, long-term debt, convertible redeemable preferred shares, and warrants. The carrying values of these financial instruments, other than long-term debt, convertible redeemable preferred shares and warrants approximate their fair values due to their short-term maturities. The convertible redeemable preferred shares were initially recorded at issue price net of issuance costs, and no subsequent adjustment was needed except for Series A and Series B Preferred Shares. The Series A Preferred Shares were initially recorded at net proceeds plus the fair value of the put option less the fair value of call options. The Series B Preferred Shares were initially recorded at net proceeds plus the fair value of the contingent purchase right. The warrants issued in connection with the long-term debt were recorded as a liability at fair value as determined on the date of issuance and subsequently adjusted to the fair value at each reporting date (Note 7). The Group determined the fair values of convertible redeemable preferred shares call and put options and warrants with the assistance of an independent third-party valuation firm.

The carrying value of long-term debt approximates its fair value due to the fact that the related interest rates are reset each year based on prevailing market interest rates.

F-10

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Cash and cash equivalents and short-term investments

Cash and cash equivalents represent cash on hand and demand deposits placed with banks or other financial institutions. All highly liquid investments with original maturities of three months or less from the date of purchase are classified as cash equivalents. All highly liquid investments with original maturities greater than three months, but less than twelve months, are classified as short-term which approximate their fair value.

During the years ended December 31, 2007, 2008 and 2009, the Company recorded short-term investments interest income of RMB25, RMB3,052 and RMB1,082 (US$159) in the consolidated statements of operations, respectively.

As of December 31, 2008 and 2009, short-term investments of RMB115,366 and nil, respectively, are six-month time deposits in commercial banks and financial institutions.

As of December 31, 2008 and 2009, the fair value of short-term investments is RMB115,334 and nil, respectively, with respective gross unrecognized loss of RMB32 and nil.

Accounts receivable

The Group considers many factors in assessing the collectability of its receivables due from its customers, such as the age of the amounts due, the customer’s payment history and credit-worthiness. An allowance for doubtful accounts is recorded in the period in which a loss is determined to be probable. Accounts receivable balances are written off after all collection efforts have been exhausted.

Property and equipment

Property and equipment are stated at cost and are depreciated or amortized using the straight-line method over the shorter of the estimated useful lives of the assets or the term of the related lease, as follows:

Office computer equipment	3 years
Office furniture and equipment	3 years
Software	3 years
Servers and network equipment	3 years
Motor vehicles	5 years

Leasehold improvements are amortized over the shorter of the estimated useful lives of the assets or the lease terms.

Repair and maintenance costs are charged to expense as incurred, whereas the cost of renewals and betterments that extend the useful life of the assets are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the asset and accumulated depreciation accounts with any resulting gain or loss reflected in the consolidated statements of operations.

F-11

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

All direct and indirect costs that are related to the construction of property and equipment and incurred before the assets are ready for their intended use are capitalized as construction in progress. Construction in progress is transferred to specific property and equipment items and depreciation of these assets commences when ready for their intended use.

Impairment of long-lived assets

In accordance with ASC subtopic 360-10 Property, Plant and Equipment: Overall (Pre-Codification: FASB No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets), long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold or use is based on the amount by which the carrying value exceeds the fair value of the asset.

Commitments and contingencies

In the normal course of business, the Group is subject to contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters. Liabilities for such contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Revenue recognition

The Group’s revenues are derived principally from online advertising services. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the related fee is reasonably assured under ASC 605-10 Revenue Recognition: Overall (Pre-Codification: Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104).

Online advertising services

Advertising contracts are signed to establish the fixed price and advertising services to be provided. Pursuant to the advertising contracts, the Group provides advertisement placements on its web pages in different formats, including but not limited to video, banners, links, logos and buttons. The Group makes a credit assessment of the customer to assess the collectability of the contract prior to entering into contracts. For those contracts for which the collectability was assessed as not reasonably assured, the Group recognizes revenue only when the cash was received and all revenue recognition criteria were met. For contracts where the Group provides customers with marketing services that contain multiple deliverables (e.g., advertisements in different formats to be delivered over different periods of time), since the Group sells the marketing services over a broad price range, there is a lack of objective and reliable evidence of fair value for each deliverable included in the arrangement, and depending on the nature of customer arrangement, revenue may be contingent upon

F-12

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

the delivery of undelivered items. Accordingly, a combined unit of accounting is used pursuant to ASC subtopic 605-25 Revenue recognition: Multiple-Element Arrangements (Pre-Codification: Emerging Issues Task Force (“EITF”) Issue No. 00-21, Revenue Arrangements with Multiple Deliverables), and such revenues are recognized ratably over the performance period of the last deliverable in the arrangement. Revenue is deferred when non-refundable payments are received from customers prior to satisfaction of revenue recognition criteria discussed above.

The Group entered into a one-year agreement in 2008 which granted the exclusive advertising rights on certain channels of the Group’s websites to one customer. The Group recognized revenue ratably during the one year contract period. No other transactions of this nature were entered into by the Group during the periods presented.

Revenue from advertising programs

The Group participates in the advertising programs run by third parties and places links to the advertisements of their customers on their website. On a monthly basis, the Group obtains data on the user traffic and the number of visitors’ clicks from these third parties. Under these programs, the Group recognizes revenues based on contractual rates applied to user traffic and the number of visitors’ clicks on the advertisements on the Group’s website.

Barter transactions

The Group enters into cross-promotional agreements, which represent advertising-for-advertising barter transactions, and follows ASC subtopic 605-20 Revenue recognition: Services (Pre-Codification: EITF Issue No. 99-17, Accounting for Advertising Barter Transactions). Such barter transactions should be recorded at fair value only if such value of the advertising surrendered in the transaction is determinable within reasonable limits. The Group did not recognize revenue for such barter transactions since the fair value is not determinable for any of the periods presented. The volume of such transactions is not significant.

Commissions to third-party advertising agencies

The Group provides cash incentives in the form of commissions to certain third-party advertising agencies based on volume and performance, and accounts for such incentives as a reduction of revenue in accordance with ASC 605-50-25 (Pre-Codification: EITF 01-9, Accounting for Consideration Given by a Vendor to a Customer). The Group accounts for cash consideration given to agencies for which it does not receive a separately identifiable benefit or cannot reasonably estimate fair value as a reduction of revenue. The Group has estimated and recorded commissions to third-party advertising agencies as follows:

	For the years ended December 31,
	2007		2008		2009		2009
	RMB		RMB		RMB		US$
Commissions to third-party advertising agencies		—		6,379		37,866		5,547

F-13

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Business tax and surcharges

Business tax and surcharges for the years ended December 31, 2007, 2008 and 2009 of RMB151, RMB3,505 and RMB16,624 (US$2,435), respectively, were recorded in cost of revenues (Note 8) in the consolidated statements of operations. The Group’s time-based online advertising services and advertising programs are subject to business taxes, surcharges and cultural development fees totaling approximately 8.5% of revenues before deduction for commissions to agencies.

Advertising expenses

Advertising expenses, primarily advertisements through media publications, are included in “Sales and marketing” and are expensed when incurred. Advertising expense for the years ended December 31, 2007, 2008 and 2009 were RMB17,848, RMB9,759 and RMB7,317 (US$1,072), respectively.

Product development expenses

Product development expenses consist primarily of personnel-related expenses (including share-based compensation cost) incurred for the development of, enhancement to, and maintenance of the Group’s website as well as costs associated with new product development and enhancement. Depreciation expenses and other operating costs are also included in product development expenses. The Group recognizes product development costs as expense when incurred.

Leases

Leases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets are accounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are expensed as incurred. The Group had no capital leases for the years ended December 31, 2007, 2008 and 2009.

Income taxes

The Group follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Group records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate.

The Group adopted the provisions of ASC subtopic 740-10 (“ASC 740-10”), Income Taxes: Overall (Pre-Codification: FIN 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109), on January 1, 2007. ASC 740-10 clarified the accounting for uncertainty in income taxes by prescribing the recognition and measurement thresholds a tax position is required to meet before being recognized in the financial statements. The Group recognizes in its consolidated

F-14

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

financial statements the benefit of a tax position if a tax return position or future tax position is “more likely than not” to prevail, which is defined as a likelihood of more than fifty percent of being sustained upon audit, based on the technical merits of the tax position. Tax positions that meet the “more likely than not” threshold are measured, using a cumulative probability approach, at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. The Group has elected to classify interest and penalties related to an uncertain tax position, if and when required, as part of income tax expense in the consolidated statements of operations. There was no cumulative effect from the adoption of ASC 740-10 to retained earnings as of January 1, 2007.

Loss per share

Loss per share is calculated in accordance with ASC subtopic 260-10, Earnings Per Share: Overall (Pre-Codification: FASB No. 128, Earnings per Share). Basic loss per share is computed by dividing net loss attributable to holders of ordinary shares by the weighted-average number of ordinary shares outstanding during the period.

Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted-average number of ordinary and dilutive ordinary share equivalents outstanding during the period. Dilutive equivalent shares are excluded from the computation of diluted loss per share if their effects would be anti-dilutive. Ordinary share equivalents consist of the ordinary shares issuable in connection with the Group’s convertible redeemable preferred shares using the if-converted method, and ordinary shares issuable upon the conversion of the stock options and the warrants, using the treasury stock method.

Share-based compensation

Options granted to employees

The Group has accounted for share-based compensation in accordance with ASC subtopic 718-10 (“ASC 718-10”), Compensation-Stock Compensation: Overall (Pre-Codification: FASB No. 123(R), Share-Based Payment), for share-based payment transactions with employees. Under the fair value recognition provisions of ASC 718-10, share-based compensation costs are measured at the grant date. The Group has elected to recognize compensation costs on the straight-line method over the requisite service period with a graded vesting schedule.

Options granted to non-employees

The Group has accounted for equity instruments issued to non-employees in accordance with the provisions of ASC 718-10 and ASC subtopic 505-50, Equity: Equity-based Payments to Non-Employees (Pre-Codification: EITF Issue No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services). All transactions in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the date on which the counterparty’s performance is completed.

F-15

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Concentration of risks

Concentration of credit risks

Financial instruments that potentially subject the Group to significant concentration of credit risk primarily consist of cash and cash equivalents, short-term investments and accounts receivable. As of December 31, 2009, the Group has RMB301,608 (US$44,186) in cash and cash equivalents, which is held in cash and bank deposits with several financial institutions in the PRC and Hong Kong. Since the global financial crisis beginning in the third quarter of 2008, the risk of bankruptcy of those banks in which the Group has deposits or investments has increased significantly. In the event of bankruptcy of one of these financial institutions, the Group may not be able to claim its deposits or investments back in full. The Group continues to monitor the financial strength of the financial institutions.

Accounts receivable are typically unsecured and derived from revenue earned from customers and agencies in the PRC, which are exposed to credit risk. The risk is mitigated by credit evaluations the Group performs on its customers and its ongoing monitoring process of outstanding balances. The Group maintains reserves for estimated credit losses and these losses have generally been within expectations.

Business and economic risks

The Group participates in a dynamic high technology industry and believes that changes in any of the following areas could have a material adverse effect on the Group’s future financial position, results of operations or cash flows: changes in the overall demand for services and products; changes in business offerings; competitive pressures due to new entrants; advances and new trends in new technologies and industry standards; changes in bandwidth suppliers; changes in certain strategic relationships or customer relationships; regulatory considerations; copyright regulations; and risks associated with the Group’s ability to attract and retain employees necessary to support its growth.

There were three and two customers who individually accounted for greater than 10% of total revenues for the years ended December 31, 2007 and 2008, respectively. The percentage of total revenues from the three customers was 33%, 17% and 11%, respectively, and the amount was RMB588, RMB300 and RMB200, respectively, for Baidu Online Network Technology (Beijing) Co., Ltd., Beijing Hua Shi Zhong Chi Technology Co., Ltd. and Nanjing Shanda Networking Co., Ltd. for the year ended December 31, 2007. The percentage of total revenues from the two customers was 15% and 10%, respectively, and the amount was RMB5,077 and RMB3,445, respectively, for Shanghai MeiCheng advertising Co., Ltd. and Beijing Shi Ji Hua Mei Advertising Co., Ltd. for the year ended December 31, 2008. For the year ended December 31, 2009, only Beijing Hylink Advertising Co., Ltd., accounted for 11% of total revenue and the amount was RMB17,039.

The Group’s operations could be adversely affected by significant political, economic and social uncertainties in the PRC.

Currency convertibility risk

Substantially all of the Group’s operating activities are transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the

F-16

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts.

Foreign currency exchange rate risk

The Group’s exposure to foreign currency exchange rate risk primarily relates to cash and cash equivalents denominated in U.S. dollars. The functional currency of the Company is the U.S. dollar, and the reporting currency is RMB. Since July 21, 2005, the RMB has been permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. The appreciation of the U.S. dollar against RMB was approximately 0.05% in 2009. Any significant revaluation of RMB may materially and adversely affect the cash flows, operating results and financial position of the Group. As a result, an appreciation of RMB against the U.S. dollar would result in foreign currency translation losses when translating the net assets of the Company from the U.S. dollar into RMB.

For the years ended December 31, 2007, 2008 and 2009, the net foreign currency translation loss resulting from the translation of the U.S. dollar functional currency to the RMB reporting currency recorded in the Company’s other comprehensive loss was RMB1,741, RMB1,041 and RMB47 (US$7), respectively.

Segment reporting

In accordance with ASC subtopic 280-10, Segment Reporting: Overall (Pre-Codification: FASB No. 131, Disclosures about Segments of an Enterprise and Related Information), the Group’s chief operating decision maker has been identified as the Chief Executive Officer who reviews the consolidated results of operations when making decisions about allocating resources and assessing performance of the Group as a whole; hence, the Group has only one single operating segment. The Group does not distinguish between markets or segments for the purpose of internal reporting. As the Group’s long-lived assets and revenue are substantially located in and derived from the PRC, no geographical segments are presented.

Comprehensive income or loss

Comprehensive income or loss is defined as the change in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Comprehensive income or loss is reported in the consolidated statements of changes in shareholders’ equity. Accumulated other comprehensive loss of the Group includes the foreign currency translation adjustments.

Unaudited pro forma shareholders’ equity

Upon the completion of a qualified initial public offering, all of the convertible redeemable preferred shares (Note 13) outstanding will automatically convert into ordinary shares.

F-17

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Unaudited pro forma shareholders’ equity as of December 31, 2009, as adjusted for the assumed conversion of the convertible redeemable preferred shares, is set forth on the consolidated balance sheets.

Unaudited pro forma net loss per share

Unaudited pro forma net loss per share for year ended December 31, 2009, as adjusted for the assumed conversion of the convertible redeemable preferred shares as of January 1, 2009, is set forth on the consolidated statements of operations.

Recent accounting pronouncements

In June 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-17 (“ASU 2009-17”), Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities (Pre-codification: FASB No. 167, Amendments to FASB Interpretation No. 46(R)), which amends guidance regarding consolidation of variable interest entities to address the elimination of the concept of a qualifying special purpose entity. ASU 2009-17 also replaces the quantitative based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of the variable interest entity, and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Additionally, ASU 2009-17 requires any enterprise that holds a variable interest in a variable interest entity to provide enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a variable interest entity. ASU 2009-17 is effective at the start of a reporting entity’s first fiscal year beginning after November 15, 2009, or January 1, 2010, for a calendar year entity. Early adoption is not permitted. The Group is currently evaluating the impact of the adoption of ASU 2009-17 on its consolidated financial statements.

In October 2009, the FASB issued ASU No. 2009-13 (“ASU 2009-13”), Multiple-Deliverable Revenue Arrangements. ASU 2009-13 amends ASC 605-25 regarding revenue arrangements with multiple deliverables. This update addresses how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting, and how the arrangement consideration should be allocated among the separate units of accounting. These updates are effective for fiscal years beginning after June 15, 2010 and to be applied retrospectively or prospectively for new or materially modified arrangements. In addition, early adoption is permitted. The Group is currently assessing the impact, if any, of the adoption of ASU 2009-13 on its consolidated financial statements.

In January 2010, the FASB issued ASU No. 2010-06 (“ASU 2010-06”), Fair Value Measurements and Disclosures: Improving Disclosures about Fair Value Measurements. ASU 2010-06 amends ASC topic 820 (“ASC 820”), Fair Value Measurements and Disclosures (Pre-codification: FASB No. 157 Fair Value Measurements) to require a number of additional disclosures regarding (1) the different classes of assets and liabilities measured at fair value, (2) the valuation techniques and inputs used, (3) the activity in Level 3 fair value measurements and (4) the transfers between Level 1, 2 and 3. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales,

F-18

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Group does not expect the adoption of ASU 2010-06 to have a material impact on its consolidated financial statements.

In February 2010, the FASB issued ASU No. 2010-08 (“ASU 2010-08”), Technical Corrections to Various Topics. This amendment eliminated inconsistencies and outdated provisions and provided the needed clarifications to various topics within ASC topic 815 (“ASC 815”). The amendments are effective for the first reporting period (including interim periods) beginning after issuance (February 2, 2010), except for certain amendments. The amendments to the guidance on accounting for income taxes in reorganizations (ASC subtopic 852-740) should be applied to reorganizations for which the date of the reorganization is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. For those reorganizations reflected in interim financial statements issued before the amendments in this ASU are effective, retrospective application is required. The clarifications of the guidance on the embedded derivates and hedging (ASC subtopic 815-15) are effective for fiscal years beginning after December 15, 2009, and should be applied to existing contracts (hybrid instruments) containing embedded derivative features at the date of adoption. The Group is currently assessing the impact, if any, of this new standard on its consolidated financial statements.

In February 2010, the FASB issued ASU No. 2010-09 (“ASU 2010-09”), Subsequent Events (ASC topic 855): Amendments to Certain Recognition and Disclosure Requirements. This amendment addresses both the interaction of the requirements of this Topic with the SEC’s reporting requirements and the intended breadth of the reissuance disclosure provision related to subsequent events (ASC paragraph 855-10-50-4). All of the amendments in this update are effective upon issuance, except for the use of the issued date for conduit debt obligors. That amendment is effective for interim or annual periods ending after June 15, 2010. The Group does not expect the adoption of ASU 2010-09 to have a material impact on its consolidated financial statements.

In April 2010, the FASB issued ASU No. 2010-13 (“ASU 2010-13”), Compensation- Stock Compensation (ASC topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades—a consensus of the FASB Emerging Issues Task Force. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. Earlier application is permitted. The Group does not expect the adoption of ASU 2010-13 to have a material impact on its consolidated financial statements.

F-19

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

3. ACCOUNTS RECEIVABLE, NET

	December 31,
	2008			2009			2009
	RMB			RMB			US$
Accounts receivable		21,404			75,489			11,060
Allowance for doubtful accounts		(465	)		(529	)		(78	)
Accounts receivable, net		20,939			74,960			10,982

The following table presents movement of the allowance for doubtful accounts:

	December 31,
	2008		2009		2009
	RMB		RMB		US$
Balance at the beginning of year		—		465		69
Additions charged to bad debt expense		465		64		9
Balance at the end of year		465		529		78

Five customers accounted for 51% of accounts receivable as of December 31, 2009 (2008: 56% and 2007: 100%) with 15%, 12%, 9%, 8% and 7%, respectively.

4. PREPAYMENTS AND OTHER ASSETS

The current and non-current portions of prepayments and other assets consist of the following:

	December 31,
	2008		2009		2009
	RMB		RMB		US$
Current portion:
Purchased copyrights		958		5,036		738
Deposits		141		1,094		160
Prepaid expenses for bandwidth		1,146		108		16
Others		1,135		1,516		222
		3,380		7,754		1,136
	December 31,
	2008		2009		2009
	RMB		RMB		US$
Non-current portion:
Purchased copyrights		—		1,460		214
Deposits		1,761		1,308		191
		1,761		2,768		405

F-20

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Purchased copyrights relate to titles to movies and television series acquired from external parties and are amortized ratably over the estimated useful lives of the titles ranging from 1 to 4 years. The amortization of purchased copyrights was nil, RMB1,450 and RMB4,581 (US$671), respectively, during the years ended December 31, 2007, 2008 and 2009.

5. PROPERTY AND EQUIPMENT, NET

Property and equipment consist of the following:

	December 31,
	2008			2009			2009
	RMB			RMB			US$
Office computer equipment		2,546			3,501			513
Office furniture and equipment		1,349			2,049			300
Software		31			375			55
Servers and network equipment		90,123			117,039			17,146
Motor vehicles		413			413			61
Leasehold improvements		2,745			3,480			510
		97,207			126,857			18,585
Less: accumulated depreciation		(36,088	)		(72,224	)		(10,581	)
Construction in progress		266			18			2
Total		61,385			54,651			8,006

Property and equipment depreciation expense for the years ended December 31, 2007, 2008 and 2009 was RMB8,726, RMB26,923, and RMB36,207 (US$5,304), respectively.

6. ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following:

	December 31,
	2008		2009		2009
	RMB		RMB		US$
Accrued advertising and promotion expenses		864		2,499		366
Accrued bonuses and individual income taxes		5,976		14,579		2,136
Accrued bandwidth and server hosting expenses		14,938		32,667		4,786
Accrued agency commissions		6,089		30,326		4,443
Accrued annual leave		471		838		123
Business tax and surcharges payable		3,508		6,919		1,014
Others		1,529		3,745		549
Total		33,375		91,573		13,417

F-21

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

7. LONG-TERM DEBT

On April 23, 2008 (the “Closing Date”), the Company entered into an equipment loan and security agreement and a supplemental agreement (collectively known as the “Loan Agreement”) with independent third parties (the “Lenders”).

According to the Loan Agreement, the Lenders agreed to make term loans to the Company from time to time from the Closing Date to the Termination Date (defined below) in an aggregate principal amount not exceeding US$10,000 (the “Commitment”). The Termination Date is the earlier of (i) the date the Lenders may terminate making loans or extending other credit pursuant to the rights of the Lenders in event of default, or (ii) December 31, 2008.

The Company can only use the loan to purchase eligible equipment, such as computer equipment, lab and shop equipment, test equipment, office equipment and other standard hardware.

The Lenders are entitled to receive a warrant instrument issued by the Company exercisable for a number of Series C Preferred Shares of the Company at an initial exercise price equal to US$0.081128308 per share, such number of shares having an aggregate exercise price equal to the sum of (i) US$350 (issued to the Lenders, equivalent to 4,314,154 shares in total immediately upon the execution of the Loan Agreement), and (ii) the product of (A) 0.035 and (B) the original principal amount of each equipment loan advanced to the Company by the Lenders.

In connection with the execution of the Loan Agreement, the Company issued a warrant to the Lenders which allow the Lenders to purchase 4,314,154 shares of the Company’s Series C Preferred Shares in April 2008, which was recognized as a liability at fair value with a corresponding asset recognized as issuance costs. The Company has amortized such issuance costs over the facility period of the Loan Agreement.

In May 2008, the Company borrowed RMB31,507 (US$4,500) and, in connection with the borrowing, issued a warrant to purchase 1,941,368 Series C Preferred Shares. The principal is to be repaid in full over a period of thirty-two months in equal, monthly installments, commencing after an initial four month period of interest-only monthly payments. Interest is charged at a fixed annual interest rate of 12% per annum.

In June 2008, the Company borrowed RMB9,688 (US$1,400). In connection with this borrowing, the Company issued an additional warrant to the Lenders to purchase 603,980 Series C Preferred Shares.

In September 2008, the Company borrowed RMB17,784 (US$2,600). In connection with this borrowing, the Company issued an additional warrant to the Lenders to purchase 1,121,680 Series C Preferred Shares.

In January 2009, the Company borrowed RMB5,333 (US$780) and RMB3,256 (US$476), respectively. In connection with these borrowings, the Company issued additional warrants to the Lenders to purchase 541,900 Series C Preferred Shares.

F-22

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

The principal for the borrowings made in June 2008, September 2008 and January 2009 is to be repaid in full over a period of thirty-six months in equal, monthly installments. Interest is charged at a fixed interest rate of 12% per annum.

The total proceeds received for the debt is first allocated to warrants based on their fair value at the time of issuance, and the remaining value is allocated to the debt. Loan discounts are amortized over the contractual life of the loans using the effective interest method. Interest expense arising from the loans are reported in the consolidated statements of operations.

Subsequent to December 31, 2009, the Group entered into a new agreement with the Lenders for a working capital loan (Note 19).

Interest expense on these loans for the years ended December 31, 2008 and 2009 was RMB4,240 and RMB6,835 (US$1,001), which include RMB591 and RMB1,001 (US$147) of discount amortization respectively. No interest expense has been capitalized in any periods presented.

Aggregate annual principal payments on long-term debt as of December 31, 2009 are as follows:

	RMB		US$
2010		24,209		3,547
2011		14,339		2,101
2012		106		16
Total		38,654		5,664

The Company has pledged its equity interest in 1Verge Internet to the Lenders for its obligation and liabilities under the Loan Agreement.

8. COST OF REVENUES

	For the years ended December 31,
	2007		2008		2009		2009
	RMB		RMB		RMB		US$
Business tax and surcharges		151		3,505		16,624		2,435
Bandwidth costs		35,733		131,926		149,479		21,899
Depreciation of servers and other equipment		7,155		25,364		33,692		4,936
Content costs		3,109		10,335		16,913		2,478
Total		46,148		171,130		216,708		31,748

9. INCOME TAXES

Cayman Islands

Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gains. Additionally, upon payment of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed.

F-23

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

China

Prior to January 1, 2008, pursuant to the Provisional Regulations of the PRC on Enterprise Income Tax and the Income Tax Law of the PRC for Foreign Invested Enterprises (“FIE”) and Foreign Enterprises, the Company’s PRC subsidiary and Jiaheyi Advertising, a VIE of which 1Verge Internet is the primary beneficiary, were subject to PRC enterprise income tax (“EIT”) at a statutory rate of 33% on taxable income.

On March 16, 2007, the PRC National People’s Congress promulgated the New Enterprise Income Tax Law (the “New EIT Law”), which became effective on January 1, 2008, adopting a unified EIT rate of 25% to all resident enterprises in China, including FIEs and domestic enterprises, except for certain entities that still enjoyed the tax holidays which were grandfathered by the New EIT Law or entitled to tax incentives under the New EIT Law. In accordance with the implementation rules of the New EIT Law, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of 15%. The EIT rate of the Company’s PRC subsidiary and its VIEs, including 1Verge Internet, 1Verge Information, and Jiaheyi Advertising, is 25% starting from January 1, 2008. However, 1Verge Information has been recognized as HNTE under the New EIT Law by relevant authorities and applied the preferential tax rate of 15% from January 1, 2010.

1Verge Information, another VIE of which 1Verge Internet is deemed primary beneficiary, is located in the Beijing Zhongguancun Science Park and was granted HNTE status and thus was entitled to a preferential EIT rate of 15% from January 1, 2006 to December 31, 2007 and from January 1, 2010 to December 31, 2011. There is no aggregate dollar and per share effects of the tax holiday as no income tax was provided.

In addition, according to the New EIT Law and its implementation rules, foreign enterprises, which have no establishment or place in the PRC but derive dividends, interest, rents, royalties and other income (including capital gains) from sources in the PRC shall be subject to PRC withholding tax (“WHT”) at 10% (a further reduced WHT rate may be available according to the applicable double tax treaty or arrangement).

Also, the New EIT Law treats enterprises established outside of China with “effective management and control” located in China as PRC resident enterprises for tax purposes. The term “effective management and control” is generally defined as exercising overall management and control over the business, personnel, accounting, properties, etc. of an enterprise. The Company, if considered a PRC resident enterprise for tax purposes, would be subject to the PRC EIT at the rate of 25% on its worldwide income. As of December 31, 2009, no detailed interpretation or guidance has been issued to define “place of effective management”. Furthermore, as of December 31, 2009, the administrative practice associated with interpreting and applying the concept of “place of effective management” is unclear. The Group has analyzed the applicability of this law and will continue to monitor the related development and application. The Company will continue to monitor its tax status.

F-24

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

The Group’s loss before taxes consists of:

	For the years ended December 31,
	2007			2008			2009			2009
	RMB			RMB			RMB			US$
Cayman Islands		(3,622	)		(11,705	)		(5,764	)		(845	)
PRC		(86,061	)		(192,755	)		(176,522	)		(25,861	)
		(89,683	)		(204,460	)		(182,286	)		(26,706	)

There was no current or deferred income tax expense for the years ended December 31, 2007, 2008 and 2009.

The reconciliation of total tax expense computed by applying the respective statutory income tax rate to pre-tax loss is as follows:

	For the years ended December 31,
	2007			2008			2009			2009
	RMB			RMB			RMB			US$
Income tax at PRC statutory rate*		(29,595	)		(51,115	)		(45,571	)		(6,676	)
International tax rate differences		1,195			2,926			1,441			211
Impact of changes in tax rate		(7,039	)		—			—			—
Non-deductible expenses		2,894			954			992			145
Uncertain tax positions		1,609			6,526			8,203			1,202
Effect of tax exemption and reduction in the PRC		12,204			—			—			—
Impact of changes in tax rate on deferred tax		—			—			9,130			1,338
Addition to valuation allowance		18,732			40,709			25,805			3,780
Taxation for the year		—			—			—			—

* The statutory income tax rate was 33% for the year ended December 31, 2007, and was changed to 25% for the years ended December 31, 2008 and 2009.

F-25

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

The tax effects of temporary differences that give rise to the deferred tax asset balances at December 31, 2007, 2008 and 2009 are as follows:

	December 31,
	2007			2008			2009			2009
	RMB			RMB			RMB			US$
Deferred tax assets, current portion:
Advertising expenses		1,812			1,201			896			131
Accrued payroll		44			162			2,364			346
Accrued expenses		321			731			10,499			1,538
Others		—			612			1,242			182
Valuation allowance		(2,177	)		(2,706	)		(15,001	)		(2,197	)
Deferred tax assets, current portion, net		—			—			—			—
Deferred tax assets, non-current portion:
Net operating loss carried forward		18,122			58,269			71,567			10,485
Fixed assets (accumulated depreciation)		1,075			1,108			1,320			193
Valuation allowance		(19,197	)		(59,377	)		(72,887	)		(10,678	)
Deferred tax assets, non-current portion, net		—			—			—			—

As of December 31, 2009, the Company had net operating loss carry forwards of approximately RMB286,266, which can be carried forward to offset future taxable income. The net operating loss carry forwards will begin to expire in 2011 if not utilized.

The changes in unrecognized tax benefits are as follows:

	December 31,
	2007		2008		2009			2009
	RMB		RMB		RMB			US$
Beginning balance		227		1,836		10,416			1,526
Additions based on tax positions of the current year		1,609		8,580		8,203			1,202
Reductions for tax positions of prior years		—		—		(2,054	)		(301	)
Ending balance		1,836		10,416		16,565			2,427

As of December 31, 2007, 2008 and 2009, the Group has approximately RMB1,836, RMB10,416 and RMB16,565 (US$2,427) of unrecognized tax benefits, none of which would affect the effective tax rate if recognized, due to the Company’s full valuation allowance position. Among the unrecognized tax benefits, approximately RMB1,609, RMB6,526 and RMB5,848 (US$857) in 2007, 2008 and 2009 are related to the estimated income tax expenses resulting from deemed interest income for loans to related parties. In 2008, the Group recorded unrecognized tax benefits of RMB1,444 related to accrued bonus for which the ultimate deductibility is certain. In 2009, the Group recognized a decrease of unrecognized tax benefits of RMB1,444 (US$212), which related primarily to the reversal of accrued bonus. In 2008, the Group recorded unrecognized tax benefits of RMB610 related to accrued interest income and litigation fee. In 2009, the Group recognized a decrease of unrecognized tax benefits of RMB610 (US$89), which related primarily to the reversal of accrued interest income and litigation fee.

F-26

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

In 2009, the Group recorded unrecognized tax benefits of RMB2,355 (US$345) related to the nondeductible portion of the technical service fees. The Company does not anticipate any material changes to its uncertain tax positions in the next 12 months.

The Group has not accrued for any interest or penalties related to the unrecognized tax positions due to the overall cumulative losses of the affected entities.

The years 2006 to 2009 remain subject to examination by the PRC tax authorities.

10. EMPLOYEE DEFINED CONTRIBUTION PLAN

Full-time employees of the Company’s subsidiary and its VIEs in the PRC participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require that the subsidiary and VIEs of the Company make contributions to the government for these benefits based on certain percentages of the employees’ salaries. The Group has no legal obligation for the benefits beyond the contributions made. The total amounts for such employee benefits, which are expensed as incurred, were RMB2,132, RMB5,005 and RMB8,973 (US$1,315) for the years ended December 31, 2007, 2008 and 2009, respectively.

11. COMMITMENTS AND CONTINGENCIES

Operating lease commitments

The Group leases facilities in the PRC under non-cancelable operating leases expiring on different dates. Payments under operating leases are expensed on a straight-line basis over the periods of the respective leases, including the free-billing period which was within fourteen months.

Total office rental expenses under all operating leases were RMB1,251, RMB3,905 and RMB7,762 (US$1,137) for the years ended December 31, 2007, 2008 and 2009, respectively.

Future minimum payments under non-cancelable operating leases of office rental consist of the following as of December 31, 2009:

	RMB		US$
2010		7,984		1,170
2011		7,041		1,031
2012		3,681		539
Thereafter		—		—
		18,706		2,740

Total bandwidth rental expenses were recorded in cost of revenues (Note 8) and product development.

F-27

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Future minimum payments under non-cancelable operating leases of bandwidth rental consist of the following as of December 31, 2009:

	RMB		US$
2010		103,098		15,104
2011		17,071		2,501
2012		697		102
Thereafter		—		—
		120,866		17,707

Litigation

1Verge Information is involved in a number of cases pending in various courts and arbitration as of December 31, 2009. These cases are substantially related to alleged copyright infringement as well as routine and incidental matters to its business, among others. Adverse results in these lawsuits may include awards of damages and may also result in, or even compel, a change in the Group’s business practices, which could impact the Group’s future financial results.

The Group has accrued RMB2,022 (US$296) in “Accrued expenses and other liabilities” in the consolidated balance sheets as of December 31, 2009. The compensation was based on judgments handed down by the court and out-of-court settlements after December 31, 2009 but related to cases arising on or before December 31, 2009. 1Verge information is in the process of appealing certain judgments for which the loss has been accrued.

Subsequent to December 31, 2009, various claims have been made in the ordinary course of business against the Group, some of which have been resolved without material impact to the Group’s operating results. Although the results of unsettled litigation and claims cannot be predicted with certainty, the Group does not expect that the outcome of the matters referred to above will result in a material adverse effect on its business and consolidated financial statements.

There are no accruals for any additional losses related to unasserted claims as the amount cannot be reasonably estimated.

12. WARRANT LIABILITY

In connection with the Loan Agreement (Note 7), warrants were issued upon signing and with each of the loan drawdowns.

The initial shares for warrants vested immediately upon execution of the Loan and Security Agreement, and the drawdown shares, will vest on the borrowing date of each equipment loan advanced to Company. The warrants are exercisable at the option of the warrant holder, at any time or from time to time, commencing from the date of issuance and expiring on December 31, 2015.

As of December 31, 2009, the warrants include piggyback and S-3 registration rights, anti-dilution protections and other rights and protections equivalent to those rights and protections included in the Series C Preferred Shares.

F-28

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

The warrants contain the following anti-dilution rights: If, in a Down Round (which is defined as any non-public offering of equity securities of the Company after the original date of issuance of the warrants at a price per share lower than the Share Purchase Price then in effect) or otherwise, a holder of convertible redeemable preferred shares has to purchase securities in a future round of equity financing or lose the benefit of anti-dilution protection applicable to the convertible redeemable preferred shares issuable upon the exercise of the warrants or the conversion of the convertible redeemable preferred shares, then the warrants will be automatically adjusted assuming that the holder had participated in the Down Round to its full pro rata shares with respect to the convertible redeemable preferred shares issuable upon exercise of the warrants.

The warrants have been classified as a current liability from the issuance date under ASC sub-topic 480 Distinguishing Liabilities from Equity: Overall, as holders are entitled to exercise into Series C Preferred Shares at US$0.081128308, which are contingently redeemable upon a deemed liquidation event. Losses of RMB264 and RMB2,313 (US$339) from the change in fair market value of the warrants were recognized in the consolidated statements of operations during the years ended December 31, 2008 and 2009, respectively. The fair value of the warrants was determined with the assistance of an independent third-party valuation firm.

The fair values of the warrants were estimated as of December 31, 2009 using a Black-Scholes option pricing model using the following assumptions:

	December 31, 2009
Fair value of Series C Preferred Shares (US$)		0.178
Exercise price (US$)		0.0811
Risk-free interest rate		3.10	%
Dividend yield		—
Expected term		6 years
Expected volatility		53.1	%

No warrants were forfeited, cancelled or exercised for the years ended December 31, 2008 and 2009.

13. CONVERTIBLE REDEEMABLE PREFERRED SHARES

On November 4, 2005, the Company issued the first batch of 60,000,000 Series A convertible redeemable preferred shares with a conversion price of US$0.05 per share to third parties investors (“Series A Investors”) in exchange for total consideration of US$3,000. Simultaneously with the Company’s issuance of Series A preferred shares, the Company issued call options to the Series A Investors which allowed each Series A Investors to purchase additional Series A preferred shares with an aggregate exercise price of US$1,500 and the Company’s ordinary shares with an aggregate exercise price of US$1,500. In addition, the Series A Investors granted a put option to the Company which allowed the Company to request that Series A Investors purchase additional Series A preferred shares with an aggregate exercise price of US$1,500. On January 18, 2007, the Company issued an additional 22,500,000 Series A preferred shares at nil consideration. Concurrently, the Company and the Series A Investors also agreed to cancel the put and call options and effectively adjusted the conversion for all Series A preferred shares to US$0.03636 per share.

F-29

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

On January 18, 2007, the Company issued 165,825,000 Series B convertible redeemable preferred shares with a conversion price of US$0.03636 per share to third-party investors in exchange for total consideration of US$6,030. Simultaneously with the Company’s issuance of Series B preferred shares, the Company granted a contingent purchase right to the investors of Series B preferred shares (“Series B Investors”) which allowed the Series B Investors to purchase additional Series B preferred shares. On July 27, 2007, the Company issued an additional 112,875,000 Series B convertible redeemable preferred shares with a conversion price of US$0.05333 per share for an aggregate purchase price of US$6,020 upon the exercise of the right.

On November 20, 2007, the Company issued 308,770,154 Series C convertible redeemable preferred shares with a conversion price of US$0.08113 per share to third-party investors in exchange for total consideration of US$25,050.

On June 20, 2008, the Company issued 209,737,212 Series D convertible redeemable preferred shares with a conversion price of US$0.14304 per share to third-party investors in exchange for total consideration of US$30,000.

On November 25, 2009, the Company issued 209,849,890 Series E convertible redeemable preferred shares with a conversion price of US$0.19085 per share to third-party investors in exchange for total consideration of US$40,050.

The significant terms of Series A, Series B, Series C, Series D and Series E preferred shares (collectively “Preferred Shares”) are summarized below:

Voting

Each holder of Preferred Shares is entitled to the number of votes equal to the number of shares of ordinary shares into which such holder’s Preferred Shares could be converted and having voting rights and powers equal to the voting rights and powers of the ordinary shares.

Dividends

Each holder of Preferred Shares is entitled to receive dividends when and if declared by the Board of Directors of the Company.

Ranking

Pursuant to the Preferred Shares agreement, the holders of Preferred Shares rank, as to dividends and upon liquidation, senior and prior to the ordinary shares issued by the Company.

Liquidation

In the event of any liquidation, dissolution or winding up of the Company or any deemed liquidation event (e.g., change in control) as defined in the Preferred Shares agreements, each holder of Preferred Shares is entitled to receive, prior to and in preference to holders of ordinary shares, an amount equal to the original issuance price plus any declared and unpaid dividends. If at the time of any liquidation event, the liquidation proceeds are either greater or lesser than the entire assets and funds of the Company legally available for distribution amongst the holder of Preferred Shares and holders of ordinary shares, the assets and funds of the Company shall be distributed ratably amongst

F-30

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

the holders of Preferred Shares first. After distribution in full to the holders of Preferred Shares, the remaining assets and funds of the Company available for distribution shall be distributed ratably amongst the holders of ordinary shares.

Conversion Rights

All Preferred Shares can be converted into ordinary shares as determined by the applicable original issue price divided by the applicable conversion price in effect at the time of conversion.

The holders of Preferred Shares shall have the following conversion rights.

a. Upon a Qualified Public Offering, as defined in the Preferred Shares agreement:

1) for the period from November 4, 2005 to November 20, 2007, if the offering price per share is not at least 200% of the original purchase price, and the conversion price of Series A and B preferred shares are adjusted such that each preferred share is convertible into that number of ordinary shares equal to 200% of the original purchase price divided by the offering price per share of such public offering for each Series A and B preferred shares;

2) for the period from November 20, 2007 to June 20, 2008, if the offering price per share is not at least 300% of each original purchase price of Series A, B and C, each conversion price of series A, B and C preferred shares are adjusted such that each preferred share is convertible into that number of ordinary shares equal to 300% of the original purchase price divided by the offering price per share of such public offering, for each Series A, B and C preferred shares; and

3) beginning June 20, 2008 and thereafter, the conversion price adjustment conditions were removed and no such term exists for Series A, B, C, D and E preferred shares.

b. If the Company issues new equity securities for consideration per share less than the conversion price for any series of Preferred Shares, then the conversion price shall be reduced to the consideration per share received by the Company.

c. All of Preferred Shares shall automatically be converted into ordinary shares at the then-effective conversion price of each issuance (i.e., conversion price as adjusted for any triggering event described in b. above) upon the closing of a qualified public offering, as defined in the Preferred Shares agreements.

Redemption

There is no redemption term stated in Preferred Shares, except all Preferred Shares are redeemable upon a liquidation event, which includes deemed liquidation events (e.g., change in control) as defined in the Preferred Shares agreement.

Accounting for the Convertible Redeemable Preferred Shares

The Preferred Shares have been classified as mezzanine equity as they are redeemable upon a liquidation event, including a deemed liquidation event (e.g., change in control) as noted above.

F-31

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Since it is not probable that the Preferred Shares will be redeemed, each issuance of the Preferred Shares should be recognized at its total proceeds net of direct and incremental costs at issuance date, except Series A and B preferred shares which are further discussed below.

Upon the issuance of the Series A preferred shares on November 4, 2005, the put option and call options, which are freestanding financial instruments, were issued by the Series A Investors and by the Company, respectively. The options are not exercisable into a fixed number of securities; therefore, the options were recognized as either an asset or a liability, as appropriate. Each option was initially reported at fair value, and subsequent changes in fair value recognized in the consolidated statements of operations. The net proceeds were first allocated to the put option and call options based on fair value with the residual amount allocated to the first batch of Series A preferred shares.

On January 18, 2007, the Company and the Series A Investors agreed to amend the terms of the Series A preferred shares such that the Company issued additional Series A preferred shares and effected the cancellation of the put option and call options, while retaining the original conversion ratio of the initial Series A preferred shares. This amendment was treated as an extinguishment of the original Series A preferred shares as it significantly modified the terms of the original Series A preferred shares. As a result, the Company derecognized the original Series A preferred share issuance as well as the put option and call options, and recognized the new Series A preferred share issuance based on its fair value as of January 18, 2007, with the residual allocated to retained earnings.

Upon the issuance of the Series B preferred shares on January 18, 2007, a contingent purchase right for additional Series B preferred shares was granted to the Series B Investors. The right represents a freestanding financial instrument under which the Company has the obligation to issue a variable number of Series B preferred shares at the holders option; therefore, the right was recognized as a liability at fair value with subsequent changes in fair value recognized in the statement of operations. The net proceeds of the issuance were first allocated to this contingent purchase right based on its fair value with the residual amount allocated to the first batch of Series B preferred shares.

As the Series B Investors subsequently exercised the contingent purchase right to purchase the additional Series B preferred shares on July 27, 2007, the fair value of the contingent purchase right was recognized as part of the consideration for the issuance of the additional Series B preferred shares.

The holders of the Preferred Shares for all series have the ability to convert the shares into the Company’s ordinary shares. The conversion option did not require bifurcation because the feature is clearly and closely related to the host equity instrument. Additionally, the conversion option does not meet the net settlement criterion to be considered a derivative as the underlying ordinary shares are not publicly traded nor readily convertible into cash.

A beneficial conversion feature exists when the conversion price of the Preferred Shares is lower than the fair value of the ordinary shares at the commitment date. When a beneficial conversion feature exists as of the commitment date, its intrinsic value is bifurcated from the carrying value of the Preferred Shares as a contribution to additional paid-in capital. The Company determined the fair value of its ordinary shares with the assistance of an independent third-party valuation firm. No beneficial

F-32

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

conversion feature was recognized for the Preferred Shares as the fair value per ordinary share at each issuance date was less than the most favorable conversion price for each issuance.

14. ORDINARY SHARES

The Company’s Memorandum and Articles of Association, as amended, authorized the Company to issue 3,901,814,436 shares of US$0.00001 par value per ordinary share. Each ordinary share is entitled to one vote. The holders of ordinary shares are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to prior rights of holders of all other classes of shares outstanding. The Company issued 365,000,000 ordinary shares to the founder at the Company’s incorporation in 2005. As of December 31, 2007, 2008 and 2009, there were 365,000,000 ordinary shares outstanding.

15. ACCUMULATED DEFICIT AND STATUTORY RESERVE FUNDS

The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiary. Relevant PRC statutory laws and regulations permit payments of dividends by the Group’s PRC subsidiary only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s subsidiary.

In accordance with the Regulations on Enterprises with Foreign Investment of China and its Articles of Association, the Company’s subsidiary, being a foreign-invested enterprise established in the PRC, is required to provide for certain statutory reserves, namely the general reserve fund, enterprise expansion fund and staff welfare and bonus fund, all of which are appropriated from net profit as reported in its PRC statutory accounts. The Company’s subsidiary is required to allocate at least 10% of its after-tax profits to the general reserve fund until such fund has reached 50% of its registered capital. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors of the Company’s subsidiary.

In accordance with the China Company Laws, the Company’s VIEs must make appropriations from their after-tax profits as reported in their PRC statutory accounts to non-distributable reserve funds, namely statutory surplus fund, statutory public welfare fund and discretionary surplus fund. The Company’s VIEs are required to allocate at least 10% of their after-tax profits to the statutory surplus fund until such fund has reached 50% of their respective registered capital. Appropriation to discretionary surplus is made at the discretion of the Company’s VIEs. However, as the VIEs have operated at a loss since inception, no appropriation has been made as of December 31, 2009.

F-33

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

The general reserve fund and statutory surplus fund are restricted to set-off against losses, expansion of production and operation and increasing registered capital of the respective company. The staff welfare and bonus fund and statutory public welfare fund are restricted to the capital expenditures for the collective welfare of employees. The reserves are not allowed to be transferred to the Company in terms of cash dividends, loans or advances, nor are they available for distribution except under liquidation.

	December 31,
	2008			2009			2009
	RMB			RMB			US$
PRC statutory reserve funds		—			—			—
Unreserved accumulated losses		(312,570	)		(494,856	)		(72,498	)
		(312,570	)		(494,856	)		(72,498	)

Under PRC laws and regulations, there are certain restrictions on the Company’s PRC subsidiary and VIEs with respect to transferring certain of their net assets to the Company either in the form of dividends, loans, or advances. Amounts restricted include paid-up capital and statutory reserve funds of the Company’s PRC subsidiary and the net assets of the VIEs in which the Company has no legal ownership, totaling approximately RMB323,174 and RMB179,225 (US$26,257) as of December 31, 2008 and 2009, respectively. All net assets of the Company’s VIEs are restricted due to the VIEs’ unreserved accumulated losses.

16. LOSS PER SHARE

The Group computes basic net loss per share in accordance with ASC subtopic 260-10 (“ASC 260-10”), Earnings Per Share: Overall (Pre-codification: FASB No. 128 Earnings per share). Under the provisions of ASC 260-10, basic net loss per share is computed using the weighted-average number of ordinary shares outstanding during the year.

Diluted net loss per share is computed using the weighted-average number of ordinary shares and, if dilutive, potential ordinary shares outstanding during the year. Potential ordinary shares consist of the incremental ordinary shares issuable upon the exercise of share options, warrants for Series C Preferred Shares and convertible redeemable preferred shares. Securities that could potentially dilute basic earnings per share (“EPS”) were not included in the computation of diluted EPS because to do so would have been anti-dilutive for the years presented.

F-34

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

The following table sets forth the computation of basic and diluted net loss per share:

	For the years ended December 31,
	2007			2008			2009			2009
	RMB			RMB			RMB			US$
Numerator:
Net loss		(89,683	)		(204,460	)		(182,286	)		(26,706	)
Denominator:
Weighted-average ordinary shares outstanding—basic and diluted		365,011,250			365,134,375			365,432,916			365,432,916
Net loss per share—basic and diluted		(0.25	)		(0.56	)		(0.50	)		(0.07	)

The Company had a weighted-average of 42,676,833, 70,561,926 and 86,881,881 ordinary share options outstanding; 322,273,223, 781,446,919 and 900,404,889 convertible redeemable preferred shares outstanding; and nil, 4,995,906 and 8,505,278 warrants to purchase convertible redeemable preferred shares outstanding during the years ended December 31, 2007, 2008 and 2009, respectively, which were excluded from the computation of diluted net loss per share, as their effect would have been anti-dilutive due to the Group’s net loss in the respective years.

17. SHARE-BASED COMPENSATION

In December 2005, the Company adopted the 2006 Option Plan (the “Plan”). The Plan provides for the granting of share options to employees, officers, directors, advisors or consultants of the Company. These options were granted with exercise prices denominated in U.S. dollars, which is the functional currency of the Company. The Company has reserved 140,441,231 ordinary shares for issuance under the Plan. The maximum term of any issued stock option is ten years from the grant date. These awards vest over a four-year schedule for employees, officers and directors as stated below:

(1) One-sixth of the options shall be vested upon the first anniversary of the grant date;

(2) One-twelfth of the options shall be vested upon the last day of each three-month period of the second and third year after the grant date; and

(3) One-twenty fourth of the options shall be vested upon the last day of each three-month period of the fourth year after the grant date.

On January 21, 2008, the Company granted 1,000,000 stock options to an external consultant with an exercise price of US$0.081128308. For this award, 200,000 shares vested on the grant date, and the remaining 800,000 shares vested on July 8, 2008, the performance completion date.

On February 21, 2009, the Company granted 200,000 stock options to another external consultant with an exercise price of US$0.143036134. For this award, 100,000 shares vested on the grant date, and the remaining 100,000 shares vested on December 31, 2009, the performance completion date.

F-35

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

In accordance with ASC 718-10, all share-based payments to employees are measured in the consolidated financial statements based on their grant-date fair values. Compensation expense is recognized on a straight-line basis, net of estimated forfeiture over the requisite service period with a graded vesting schedule.

The following table summarizes the stock option activity for the years ended December 31, 2007, 2008 and 2009:

Share options	Number of shares			Weighted- average exercise price (US$)		Weighted- average grant-date fair value (US$)		Weighted- average remaining contractual life (years)		Aggregate intrinsic value (US$)
Outstanding, January 1, 2007		22,402,500			0.0200		0.0136		9.16		177
Granted		38,627,500			0.0366		0.0219
Exercised*		(22,500	)		0.0253		0.0128
Forfeited		(8,119,167	)		0.0279		0.0151
Outstanding, December 31, 2007		52,888,333			0.0328		0.0194		8.92		2,132
Granted		24,582,000			0.0908		0.0445
Exercised*		(223,750	)		0.0287		0.0154
Forfeited		(1,343,250	)		0.0648		0.0331
Outstanding, December 31, 2008		75,903,333			0.0510		0.0273		8.33		4,758
Granted		23,973,000			0.1430		0.0544
Exercised*		(373,331	)		0.0548		0.0341
Forfeited		(5,780,669	)		0.1092		0.0470
Outstanding, December 31, 2009		93,722,333			0.0710		0.0330		7.76		9,180
Vested and expected to vest at December 31, 2009		89,107,478			0.0679				7.69		9,003
Exercisable at December 31, 2009		50,409,771			0.0426				7.09		6,368

* Represents options exercised but the corresponding shares not yet issued

Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Based upon the Company’s historical and expected forfeitures for stock options granted, the Company estimated that its future forfeiture rate would be 11% for employees and 4% for senior management.

The aggregate intrinsic value in the table above represents the difference between the fair value of the Company’s ordinary shares as of December 31, 2009 and the exercise price.

Total intrinsic value of options exercised as of December 31, 2007, 2008 and 2009 was US$1, US$19 and US$43, respectively.

F-36

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Total fair value of options vested as of December 31, 2007, 2008 and 2009 was US$88, US$402 and US$698, respectively.

As of December 31, 2009, there was RMB10,760 (US$1,576) of unrecognized share-based compensation cost related to stock options, which is expected to be recognized over a weighted-average vesting period of 2.72 years. To the extent the actual forfeiture rate is different from the Company’s estimate, actual share-based compensation related to these awards may be different from the expectation.

The binomial option pricing model is used to determine the fair value of the stock options granted to employees. The binomial model requires the input of highly subjective assumptions, including the expected stock price volatility and the sub-optimal early exercise factor. For expected volatilities, the Company has made reference to historical volatilities of several comparable companies. The sub-optimal early exercise factor was estimated based on the vesting and contractual terms of the awards and management’s expectation of exercise behavior of the grantees. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The fair values of stock options granted during the years ended December 31, 2007, 2008 and 2009 were estimated using the following weighted-average assumptions:

	2007			2008			2009
Risk-free interest rate		4.21 to 4.94	%		3.85 to 4.34	%		3.26 to 3.98	%
Dividend yield		—			—			—
Volatility rate		65.00 to 67.00	%		63.53 to 64.11	%		65.40 to 66.40	%
Sub-optimal early exercise factor		2 times			2 times			2 times

Total compensation cost recognized for the years ended December 31, 2007, 2008 and 2009 are as follows:

	For the years ended December 31,
	2007		2008		2009		2009
	RMB		RMB		RMB		US$
Cost of revenues		—		259		283		41
Product development		684		1,401		1,657		243
Sales and marketing		141		861		1,690		248
General and administrative		424		1,144		935		137
Total		1,249		3,665		4,565		669

18. FAIR VALUE MEASUREMENTS

Effective January 1, 2008, the Group adopted ASC 820-10, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Although adoption did not impact the Group’s consolidated financial statements, ASC 820-10 requires additional disclosures to be provided on fair value measurements.

F-37

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

ASC 820-10 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets

Level 2—Include other inputs that are directly or indirectly observable in the marketplace

Level 3—Unobservable inputs which are supported by little or no market activity

ASC 820-10 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

The Company’s short-term investments were classified as held-to-maturity securities and stated at amortized cost. In accordance with ASC 820-10, the Group measures the fair value of time deposits in cash equivalents and short-term investments by using the discounted cash flow model with market interest rates as a discount curve. Time deposits and short-term investments are classified as Level 2. The preferred shares warrants, put option, call option and contingent purchase right are measured at fair value, and are classified as Level 3 by using the income approach based on inputs that are unobservable in the market.

19. SUBSEQUENT EVENTS

In February 2010, the Company granted 20,679,600 share options to directors, employees and consultants with an exercise price of US$0.190850707.

On April 27, 2010, the Company acquired all of the equity interests in Jet Brilliant Limited, a Hong Kong company which wholly owns Beijing Jet Brilliant Advertising Co., Ltd., an advertising company established in Beijing, China, for consideration of US$263.

On May 19, 2010, Jiaheyi Advertising transferred its 95% equity interest in 1Verge Information to Ms. Qiong Qin and Mr. Dele Liu, related parties of the Group. After such transfer, 1Verge Information is 80% owned by Ms. Qiong Qin and 20% owned by Mr. Dele Liu. Prior to and after such transaction, Ms. Qiong Qin and Mr. Dele Liu have owned and have continued to own 4% and 1% equity interests in Jiaheyi Advertising.

On July 13, 2010, the Company entered into a working capital loan agreement of up to US$10,000 with Venture Lending & Leasing V, Inc. and Venture Lending & Leasing VI, Inc. (the “Lenders”). According to the agreement, principal and interest at the designated annual interest rate 12% shall be fully amortized over a period of thirty-two months in equal monthly installments commencing after an initial four-month period of interest-only monthly payments. The Company borrowed US$5,000 on July 14, 2010 from the Lenders under the agreement. In connection with this

F-38

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

borrowing, the Company issued a warrant to the Lenders which allow the Lenders to purchase either Series E Preferred Shares or the next of round preferred shares upon the exercise of the warrant. Prior to the issuance of the next round of preferred shares, if the Company consummates a bridge financing, Venture Lending & Leasing V, Inc. and Venture Lending & Leasing VI, Inc. could elect to surrender this warrant and receive in exchange all of the same consideration, securities, instruments and rights. The remaining US$5,000 under the loan agreement will expire on October 31, 2010.

20. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

Balance Sheets

			As of December 31,
	Notes		2008			2009			2009
			RMB			RMB			US$
ASSETS
Current assets:
Cash and cash equivalents				10,866			206,419			30,241
Due from subsidiaries				325			66,985			9,813
Other current assets				416			174			21
Total current assets				11,607			273,578			40,075
Non-current assets:
Property and equipment, net				—			202			30
Investment in subsidiary				243,390			66,869			9,797
Total non-current assets				243,390			67,071			9,827
TOTAL ASSETS				254,997			340,649			49,902
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt		7		18,681			24,031			3,520
Warrant liability		12		4,729			7,356			1,078
Total current liabilities				23,410			31,387			4,598
Non-current liabilities:
Long-term debt		7		31,956			14,275			2,091
Total non-current liabilities				31,956			14,275			2,091
Total liabilities				55,366			45,662			6,689
Convertible redeemable preferred shares		13		507,614			780,599			114,358
Youku.com Inc. shareholders’ equity (deficit):
Ordinary shares		14		30			30			4
Additional paid-in capital				7,769			12,473			1,826
Accumulated other comprehensive loss				(3,212	)		(3,259	)		(477	)
Accumulated deficit		15		(312,570	)		(494,856	)		(72,498	)
Total shareholders’ equity (deficit)				(307,983	)		(485,612	)		(71,145	)
TOTAL LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY				254,997			340,649			49,902

F-39

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Statements of Operations

		Years ended December 31,
	Notes	2007			2008			2009			2009
		RMB			RMB			RMB			US$
Net revenues			—			—			9,578			1,403
Cost of revenues			—			—			—			—
Gross profit			—			—			9,578			1,403
Operating expenses:
Product development			—			(4	)		(78	)		(12	)
Sales and marketing			—			(53	)		—			—
General and administrative			(662	)		(1,298	)		(1,553	)		(228	)
Total operating expenses			(662	)		(1,355	)		(1,631	)		(240	)
(Loss) / profit from operations			(662	)		(1,355	)		7,947			1,163
Interest income			711			199			2			—
Interest expense	7		—			(4,240	)		(6,835	)		(1,001	)
Equity in losses of subsidiary			(87,310	)		(196,420	)		(181,087	)		(26,529	)
Amortization of debt issuance costs			—			(2,380	)		—			—
Change in fair value of derivative financial liabilities and warrant liability	12		(2,422	)		(264	)		(2,313	)		(339	)
Loss before income taxes			(89,683	)		(204,460	)		(182,286	)		(26,706	)
Income taxes			—			—			—			—
Net loss			(89,683	)		(204,460	)		(182,286	)		(26,706	)

F-40

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Cash Flow Statements

	Years ended December 31,
	2007			2008			2009			2009
	RMB			RMB			RMB			US$
Cash flows from operating activities:
Net loss		(89,683	)		(204,460	)		(182,286	)		(26,706	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity in losses of subsidiary		87,310			196,420			181,087			26,529
Amortization of debt issuance costs		—			2,380			—			—
Accretion of long-term debt discounts		—			591			1,001			147
Other reconciling items		7			6			78			11
Change in fair value of derivative financial liabilities and warrant liability		2,422			264			2,313			339
Changes in operating assets and liabilities:
Other current assets		(119	)		409			(66,629	)		(9,761	)
Accrued expenses and other liabilities		452			68			(60	)		(6	)
Net cash provided by (used in) operating activities		389			(4,322	)		(64,496	)		(9,447	)
Cash flows from investing activities:
Acquisition of property and equipment		—			(231	)		(95	)		(14	)
Purchase of investments		(194,278	)		(321,572	)		—			—
Net cash used in investing activities		(194,278	)		(321,803	)		(95	)		(14	)
Cash flows from financing activities:
Proceeds from issuance of Series B Preferred Shares		57,284			—			—			—
Proceeds from issuance of Series C Preferred Shares		185,117			—			—			—
Proceeds from issuance of Series D Preferred Shares		—			206,028			—			—
Proceeds from issuance of Series E Preferred Shares		—			—			273,413			40,055
Exercise of employee stock options		25			24			139			20
Drawdown of long-term debt		—			58,979			8,589			1,258
Principal repayments on long-term debt		—			(7,366	)		(21,548	)		(3,157	)
Payment of convertible redeemable preferred shares issuance costs		(1,078	)		(1,744	)		(428	)		(63	)
Debt commitment fee received (paid)		—			(31	)		26			4
Net cash provided by financing activities		241,348			255,890			260,191			38,117
Effect of exchange rate changes on cash and cash equivalents		(1,741	)		(1,042	)		(47	)		(7	)
Net increase (decrease) in cash and cash equivalents		45,718			(71,277	)		195,553			28,649
Cash and cash equivalents at beginning of the year		36,425			82,143			10,866			1,592
Cash and cash equivalents at end of the year		82,143			10,866			206,419			30,241

(a) Basis of presentation

The condensed financial information of the Company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the Company used the equity method to account for investment in its subsidiary.

The Company records its investment in its subsidiary under the equity method of accounting. Such investment is presented on the balance sheets as “Investment in subsidiary” and share of their loss as “Equity in losses of subsidiary” on the statements of operations.

The subsidiary has restrictions on its ability to pay dividends to the Company under PRC laws and regulations (Note 15). The subsidiary did not pay any dividends to the Company for the years presented.

F-41

YOUKU.COM INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted by reference to the consolidated financial statements.

(b) Commitments

The Company does not have any significant commitments or long-term obligations as of any of the periods presented, except for those disclosed in the consolidated financial statements (Notes 7 and 11).

21. UNAUDITED PRO FORMA LOSS PER SHARE

On November 4, 2005, January 18, July 27 and November 20, 2007, June 20, 2008, and November 25, 2009, the Company issued Series A, Series B, Series C, Series D and Series E preferred shares, respectively (Note 13), which will be converted automatically into ordinary shares upon the completion of a Qualified Public Offering. Assuming the conversion had occurred on January 1, 2009, based on existing terms of the Preferred Shares as of December 31, 2009, the pro forma basic and diluted loss per share for the year ended December 31, 2009 are calculated as follows:

	For the year ended December 31, 2009
	RMB			US$
Numerator:
Net loss		(182,286	)		(26,706	)
Denominator:
Number of shares outstanding		365,432,916			365,432,916
Conversion of convertible redeemable preferred shares to ordinary shares		1,089,557,256			1,089,557,256
Denominator for pro forma basic and diluted net loss per share		1,454,990,172			1,454,990,172
Pro forma basic and diluted net loss per share		(0.13	)		(0.02	)

F-42

YOUKU.COM INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2009 AND SEPTEMBER 30, 2010 (UNAUDITED)

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

		As of
	Notes	December 31, 2009		September 30, 2010		September 30, 2010		September 30, 2010	September 30, 2010
		RMB		RMB		US$		RMB	US$
				(Unaudited)		(Unaudited)		(Unaudited pro forma)
ASSETS
Current assets:
Cash and cash equivalents			301,608		440,554		65,848
Accounts receivable, net	3		74,960		169,872		25,390
Intangible assets	5		5,036		13,388		2,001
Prepayments and other assets	4		2,718		8,724		1,304
Total current assets			384,322		632,538		94,543
Non-current assets:
Property and equipment, net	6		54,651		57,071		8,530
Intangible assets	5		1,460		40,529		6,058
Capitalized content production costs			—		1,750		262
Prepayments and other assets	4		1,308		6,910		1,033
Total non-current assets			57,419		106,260		15,883
TOTAL ASSETS			441,741		738,798		110,426
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable			6,309		31,613		4,725
Advances from customers			3,210		1,523		230
Accrued expenses and other liabilities	7		91,573		168,926		25,249
Current portion of long-term debt	8		24,031		25,476		3,808
Warrant liability	12		7,356		32,504		4,858
Total current liabilities			132,479		260,042		38,870
Non-current liabilities:
Long-term debt	8		14,275		21,791		3,257
Total non-current liabilities			14,275		21,791		3,257
Total liabilities			146,754		281,833		42,127

F-43

YOUKU.COM INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2009 AND SEPTEMBER 30, 2010 (UNAUDITED)—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

		As of
	Notes	December 31, 2009		September 30, 2010		September 30, 2010		September 30, 2010		September 30, 2010
		RMB		RMB		US$		RMB		US$
				(Unaudited)		(Unaudited)		(Unaudited pro forma)
Commitments and contingencies	11
Convertible redeemable preferred shares	13
Series A convertible redeemable preferred shares (“Series A Preferred Shares”) (US$0.00001 par value, 82,500,000 shares authorized, issued and outstanding as of December 31, 2009 and September 30, 2010; with aggregate amount of liquidation preference of US$3,000 for 2009 and 2010)			24,523		24,523		3,665		—		—
Series B convertible redeemable preferred shares (“Series B Preferred Shares”) (US$0.00001 par value, 278,700,000 shares authorized, issued and outstanding as of December 31, 2009 and September 30, 2010; with aggregate amount of liquidation preference of US$12,050 for 2009 and 2010)			94,248		94,248		14,087		—		—
Series C convertible redeemable preferred shares (“Series C Preferred Shares”) (US$0.00001 par value, 317,398,462 shares authorized as of December 31, 2009 and September 30, 2010, 308,770,154 shares issued and outstanding as of December 31, 2009 and September 30, 2010; with aggregate amount of liquidation preference of US$25,050 for 2009 and 2010)			183,998		183,998		27,501		—		—
Series D convertible redeemable preferred shares (“Series D Preferred Shares”) (US$0.00001 par value, 209,737,212 shares authorized, issued and outstanding as of December 31, 2009 and September 30, 2010; with aggregate amount of liquidation preference of US$30,000 for 2009 and 2010)			204,845		204,845		30,617		—		—
Series E convertible redeemable preferred shares (“Series E Preferred Shares”) (US$0.00001 par value, 209,849,890 shares authorized, issued and outstanding as of December 31, 2009, 213,779,664 Shares authorized as of September 30, 2010, 209,849,890 Shares issued and outstanding as of September 30, 2010; with aggregate amount of liquidation preference of US$40,050 for 2009 and 2010)			272,985		272,985		40,802		—		—

F-44

YOUKU.COM INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2009 AND SEPTEMBER 30, 2010 (UNAUDITED)—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

			As of
	Notes		December 31, 2009			September 30, 2010			September 30, 2010			September 30, 2010			September 30, 2010
			RMB			RMB			US$			RMB			US$
						(Unaudited)			(Unaudited)			(Unaudited pro forma)
Series F convertible redeemable preferred shares (“Series F Preferred Shares”) (US$0.00001 par value, 100,465,709 shares authorized, issued and outstanding as of September 30, 2010; with aggregate amount of liquidation preference of US$50,000 for 2010)				—			321,726			48,087			—			—
Total convertible redeemable preferred shares				780,599			1,102,325			164,759			—			—
Shareholders’ equity (deficit):
Ordinary shares		14		30			30			4			114			17
Additional paid-in capital				12,473			19,951			2,982			1,122,192			167,728
Accumulated other comprehensive loss				(3,259	)		(3,524	)		(527	)		(3,524	)		(527	)
Accumulated deficit				(494,856	)		(661,817	)		(98,919	)		(661,817	)		(98,919	)
Total shareholders’ equity (deficit)				(485,612	)		(645,360	)		(96,460	)		456,965			68,299
TOTAL LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY				441,741			738,798			110,426

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

F-45

YOUKU.COM INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

		For the nine months ended September 30,
	Notes	2009			2010			2010
		RMB			RMB			US$
		(Unaudited)			(Unaudited)			(Unaudited)
Net revenues			99,784			234,623			35,068
Cost of revenues	9		(157,684	)		(248,719	)		(37,175	)
Gross loss			(57,900	)		(14,096	)		(2,107	)
Operating expenses:
Product development			(15,003	)		(21,260	)		(3,178	)
Sales and marketing			(46,485	)		(91,527	)		(13,680	)
General and administrative			(13,043	)		(18,716	)		(2,797	)
Total operating expenses			(74,531	)		(131,503	)		(19,655	)
Loss from operations			(132,431	)		(145,599	)		(21,762	)
Interest income			1,840			1,068			160
Interest expenses			(5,401	)		(4,963	)		(742	)
Change in fair value of derivative financial liabilities and warrant liability	12		(357	)		(17,532	)		(2,620	)
Others, net			48			65			10
Loss before income taxes			(136,301	)		(166,961	)		(24,954	)
Income taxes	10		—			—			—
Net loss			(136,301	)		(166,961	)		(24,954	)
Net loss per share, basic and diluted	15		(0.37	)		(0.46	)		(0.07	)
Shares used in computation, basic and diluted	15		365,268,611			365,675,115			365,675,115
Pro forma net loss per share, basic and diluted	19					(0.11	)		(0.02	)
Shares used in pro forma net loss per share computation, basic and diluted	19					1,555,698,080			1,555,698,080

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

F-46

YOUKU.COM INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF

CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 and 2010

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares)

	Number of ordinary shares		Ordinary shares		Additional paid-in capital		Accumulated other comprehensive loss			Retained earnings (accumulated deficit)			Total shareholders’ equity (deficit)
			RMB		RMB		RMB			RMB			RMB
Balances at January 1, 2009		365,000,000		30		7,769		(3,212	)		(312,570	)		(307,983	)
Comprehensive loss:
Foreign currency translation adjustment								(17	)					(17	)
Net loss											(136,301	)		(136,301	)
Total comprehensive loss														(136,318	)
Exercise of stock options						35								35
Share-based compensation						3,248								3,248
Balances at September 30, 2009 (Unaudited)		365,000,000		30		11,052		(3,229	)		(448,871	)		(441,018	)
Balances at January 1, 2010		365,000,000		30		12,473		(3,259	)		(494,856	)		(485,612	)
Comprehensive loss:
Foreign currency translation adjustment								(265	)					(265	)
Net loss											(166,961	)		(166,961	)
Total comprehensive loss														(167,226	)
Exercise of stock options						103								103
Share-based compensation						7,375								7,375
Balances at September 30, 2010 (Unaudited)		365,000,000		30		19,951		(3,524	)		(661,817	)		(645,360	)
Balances at September 30, 2010, In US$ (Unaudited)				4		2,982		(527	)		(98,919	)		(96,460	)

The accompanying notes are an integral part of the

unaudited interim condensed consolidated financial statements.

F-47

YOUKU.COM INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))

	For the nine months ended September 30,
	2009			2010			2010
	RMB			RMB			US$
	(Unaudited)			(Unaudited)			(Unaudited)
Cash flows from operating activities:
Net loss		(136,301	)		(166,961	)		(24,954	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		26,335			32,283			4,825
Bad debt expense		216			664			99
Amortization of intangible assets		2,383			31,935			4,773
Accretion of long-term debt discounts		861			1,451			217
Loss on disposal of property and equipment		44			23			3
Foreign exchange loss		—			5			1
Share–based compensation		3,248			7,375			1,102
Change in fair value of derivative financial liabilities and warrant liability		357			17,532			2,620
Changes in operating assets and liabilities:
Accounts receivable		(46,733	)		(95,576	)		(14,285	)
Prepayments and other assets		1,357			(1,926	)		(288	)
Capitalized content production costs		—			(1,750	)		(262	)
Accounts payable		(512	)		(110	)		(16	)
Advances from customers		(575	)		(1,687	)		(252	)
Accrued expenses and other liabilities		50,784			60,095			8,983
Net cash used in operating activities		(98,536	)		(116,647	)		(17,434	)
Cash flows from investing activities:
Acquisition of property and equipment		(19,082	)		(28,623	)		(4,278	)
Deposit for acquisition of equity interests		—			(1,707	)		(256	)
Proceeds from short-term investments		94,000			—			—
Acquisition of intangible assets		(4,258	)		(62,477	)		(9,338	)
Net cash provided by (used in) investing activities		70,660			(92,807	)		(13,872	)

F-48

YOUKU.COM INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))

		For the nine months ended September 30,
	Notes	2009			2010			2010
		RMB			RMB			US$
		(Unaudited)			(Unaudited)			(Unaudited)
Cash flows from financing activities:
Exercise of employee stock options			35			103			15
Proceeds from issuance of Series F Preferred Shares			—			334,985			50,069
Drawdown of long-term debt			8,589			33,875			5,063
Principal repayments on long-term debt			(15,888	)		(18,943	)		(2,831	)
Debt commitment fee received (paid)			26			(136	)		(20	)
Payment of deferred initial public offering costs			—			(566	)		(85	)
Payment of convertible redeemable preferred shares issuance costs			—			(648	)		(97	)
Net cash provided by (used in) financing activities			(7,238	)		348,670			52,114
Effect of exchange rate changes on cash and cash equivalents			(17	)		(270	)		(40	)
Net (decrease) increase in cash and cash equivalents			(35,131	)		138,946			20,768
Cash and cash equivalents at beginning of the period			88,915			301,608			45,080
Cash and cash equivalents at end of the period			53,784			440,554			65,848
Supplemental disclosures of cash flow information:
Cash paid for interest			4,689			3,345			500
Purchase of property and equipment included in accounts payable			2,756			12,075			1,805

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

F-49

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

1. ORGANIZATION AND BASIS OF PRESENTATION

The unaudited interim condensed consolidated financial statements of Youku.com Inc. (the “Company”), its subsidiaries, 1Verge Internet Technology (Beijing) Co., Ltd., Jet Brilliant Limited (Hong Kong) and Jet Brilliant Advertising Co., Ltd., and variable interest entities, 1Verge Information Technology (Beijing) Co., Ltd. and Jiaheyi Advertising (Beijing) Co., Ltd., collectively referred to as the “Group”, were prepared on a basis substantially consistent with the Group’s audited consolidated financial statements for the year ended December 31, 2009. These unaudited interim condensed consolidated financial statements were prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by generally accepted accounting principles for annual financial statements.

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the financial position, operating results and cash flows of the Group for each of the periods presented. The results of operations for the nine months ended September 30, 2010 are not necessarily indicative of results to be expected for any other interim period or for the year ending December 31, 2010. The condensed consolidated balance sheet as of December 31, 2009 was derived from the audited consolidated financial statements at that date but does not include all of the disclosures required by U.S. GAAP for annual financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2009.

The People’s Republic of China (“PRC”) laws and regulations prohibit or restrict foreign ownership of Internet content and advertising businesses. To comply with these foreign ownership restrictions, the Group operates its websites and provides online advertising services in the PRC through variable interest entities (“VIEs”), the PRC legal entities that were established by individuals authorized by the Group. The Company has entered into business operation, pledge, loan, share option, exclusive technical and consulting, domain name license and trademark license agreements (the “Contractual Agreements”) with the VIEs through 1Verge Internet, which obligate 1Verge Internet to absorb a majority of the expected losses from the VIEs’ activities and entitles 1Verge Internet to receive a majority of residual returns from the VIEs.

The Company consolidates the VIEs in accordance with SEC Regulation SX-3A-02 and Accounting Standards Codification (“ASC”) 810-10 Consolidation: Overall (Pre-codification: Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 46(R), Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51) through the signed Contractual Agreements. The Company is required to continue to consolidate the VIEs through 1Verge Internet under the new guidance in ASU 2009-17 effective January 1, 2010, because the Company has determined that 1) 1Verge Internet is most closely associated with the VIEs among the members of the related party group who share the power to direct the activities of the VIEs that most significantly impact their economic performance, and 2) has the obligation to absorb losses or the right to receive benefits of the VIEs that could potentially be significant to the VIEs.

F-50

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of estimates

The preparation of the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from these estimates.

Convenience translation

Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of RMB6.6905 to US$1.00 on September 30, 2010 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate.

Cash and cash equivalents

Cash and cash equivalents represent cash on hand and demand deposits placed with banks or other financial institutions. All highly liquid investments with original maturities of three months or less from the date of purchase are classified as cash equivalents. All highly liquid investments with original maturities greater than three months, but less than twelve months, are classified as short-term which approximate their fair value.

Capitalized content production costs

The Company contracts for the production of, and self produces, short films to exhibit on its websites. Capitalized content production costs (which include direct production costs, production overhead and acquisition costs) are stated at the lower of unamortized cost or estimated fair value.

Non-episodic film costs

The Company estimates total revenues to be earned (“ultimate revenues”) throughout the life of a film. Ultimate revenue estimates for the produced films are periodically reviewed and adjustments, if any, will result in changes to amortization rates. Estimates used in calculating the fair value of the self produced content are based upon assumptions about future demand and market conditions.

Non-episodic film costs are only capitalized when the revenue stream related to the produced videos is determinable either through specific advertising contracts or other circumstances whereby revenue can be determined to be associated with the specific video and the same amount of revenue can be reasonably estimated.

The Company amortizes produced film cost using the individual-film-forecast-computation method, which amortizes such costs in the same ratio that current period actual revenue (numerator) bears to estimated remaining unrecognized ultimate revenue as of the beginning of the fiscal year (denominator).

F-51

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Episodic film costs

Due to the same uncertainty of making reliable estimates discussed for non-episodic films, for episodic films, estimates of ultimate revenues are limited to the amount of revenue contracted for each episode. Accordingly, production costs incurred in excess of the amount of revenue contracted for each episode are expensed as incurred on an episode-by-episode basis.

The Company amortizes such costs for each episode in the same ratio that current period actual revenue (numerator) bears to estimated remaining unrecognized ultimate revenue as of the beginning of the current period (denominator) which is related to each episode.

Intangible assets

Intangible assets with finite lives are carried at cost less accumulated amortization. The purchased copyrights are amortized using a straight-line method over the estimated useful lives of related purchased copyrights. The advertising license is amortized using the straight-line method over the remaining term of the license. As of September 30, 2010, intangible assets have weighted-average useful lives from the date of purchase as follows:

Purchased copyrights	2.13 years
Advertising license	28 years

Commissions to third-party advertising agencies

The Group provides cash incentives in the form of commissions to certain third-party advertising agencies based on volume and performance, and accounts for such incentives as a reduction of revenue in accordance with ASC 605-50-25 (Pre-codification: Emerging Issues Task Force (“EITF”) No. 01-9, Accounting for Consideration Given by a Vendor to a Customer). The Group accounts for cash consideration given to agencies for which it does not receive a separately identifiable benefit or cannot reasonably estimate fair value as a reduction of revenue. The Group has estimated and recorded commissions to third-party advertising agencies as follows:

	For the nine months ended September 30,
	2009		2010		2010
	RMB		RMB		US$
	(Unaudited)		(Unaudited)		(Unaudited)
Commissions to third-party advertising agencies		22,761		53,888		8,054

Comparative information

Certain items in prior year/periods’ consolidated financial statements have been reclassified to conform to the current period’s presentation to facilitate comparison.

F-52

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Recent accounting pronouncements

In June 2009, the FASB issued FASB No. 167, Amendments to FASB Interpretation No. 46(R), as codified in ASC 810. ASC 810 eliminates FASB Interpretation 46(R)’s exceptions to consolidating qualifying special-purpose entities, contains new criteria for determining the primary beneficiary of a variable interest entity, and increases the frequency of required reassessments to determine whether a company is the primary beneficiary of a variable interest entity. ASC 810 is effective for annual reporting periods beginning after November 15, 2009. The adoption of ASC 810 did not have a material impact on the Group’s condensed consolidated financial statements.

In October 2009, the FASB issued ASU No. 2009-13 (“ASU 2009-13”), Multiple-Deliverable Revenue Arrangements. ASU 2009-13 amends ASC 605-25 regarding revenue arrangements with multiple deliverables. This update addresses how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting, and how the arrangement consideration should be allocated among the separate units of accounting. These updates are effective for fiscal years beginning after June 15, 2010 and to be applied retrospectively or prospectively for new or materially modified arrangements. The Group is currently assessing the impact, if any, of the adoption of ASU 2009-13.

In January 2010, the FASB issued ASU No. 2010-06 (“ASU 2010-06”), Disclosures about Fair Value Measurements, which amends ASC topic 820 and provides for disclosure of the amount of significant transfers in or out of Level 1 and Level 2, the reasons for those transfers, as well as information in the Level 3 rollforward about purchases, sales, issuances and settlements on a gross basis. ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for the requirement to provide Level 3 activity on a gross basis, which is effective for all interim and annual periods beginning after December 15, 2010. The adoption of ASU 2010-06 did not have a material effect on the Group’s condensed consolidated financial statements.

3. ACCOUNTS RECEIVABLE, NET

	As of
	December 31, 2009			September 30, 2010			September 30, 2010
	RMB			RMB			US$
				(Unaudited)			(Unaudited)
Accounts receivable		75,489			171,065			25,568
Allowance for doubtful accounts		(529	)		(1,193	)		(178	)
Accounts receivable, net		74,960			169,872			25,390

F-53

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

4. PREPAYMENTS AND OTHER ASSETS

The current and non-current portions of prepayments and other assets consist of the following:

	As of
	December 31, 2009		September 30, 2010		September 30, 2010
	RMB		RMB		US$
			(Unaudited)		(Unaudited)
Current portion:
Deposits		1,094		907		136
Prepaid expenses for bandwidth		108		—		—
Deferred initial public offering costs		—		5,380		805
Others		1,516		2,437		363
		2,718		8,724		1,304

	As of
	December 31, 2009		September 30, 2010		September 30, 2010
	RMB		RMB		US$
			(Unaudited)		(Unaudited)
Non-current portion:
Prepaid copyrights		—		2,438		364
Deposits		1,308		2,765		413
Deposit for equity interests		—		1,707		256
		1,308		6,910		1,033

Deferred initial public offering costs represent costs incurred by the Company directly attributable to a proposed offering of the Company’s equity shares in the United States and will be charged against the gross proceeds from such offering.

5. INTANGIBLE ASSETS

	As of December 31, 2009
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
	RMB		RMB			RMB
Current portion:
Purchased copyrights		8,915		(3,879	)		5,036
Non-current portion:
Purchased copyrights		1,460		—			1,460

F-54

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

	As of September 30, 2010
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Net Carrying Value
	RMB		RMB			RMB		US$
	(Unaudited)		(Unaudited)			(Unaudited)		(Unaudited)
Current portion:
Purchased copyrights		22,673		(9,285	)		13,388		2,001
Non-current portion:
Purchased copyrights		47,201		(8,303	)		38,898		5,814
Advertising license		1,636		(5	)		1,631		244
		48,837		(8,308	)		40,529		6,058

Advertising license relates to acquired advertising license and is amortized ratably over the remaining term of the license of 28 years.

Purchased copyrights relate to titles to movies and television series acquired from external parties and are amortized ratably over the estimated useful lives of the titles ranging from 9 months to 5 years.

Amortization expense was RMB2,383 and RMB31,935 (US$4,773) for the nine months ended September 30, 2009 and 2010, respectively. Estimated amortization expense relating to the existing intangible assets for each of the next five years is as follows:

	RMB		US$
Within 1 year		29,503		4,410
Between 1 and 2 years		12,291		1,837
Between 2 and 3 years		7,022		1,050
Between 3 and 4 years		2,763		413
Between 4 and 5 years		910		136

F-55

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

6. PROPERTY AND EQUIPMENT, NET

Property and equipment consist of the following:

	As of
	December 31, 2009			September 30, 2010			September 30, 2010
	RMB			RMB			US$
				(Unaudited)			(Unaudited)
Office computer equipment		3,501			4,915			735
Office furniture and equipment		2,049			3,489			522
Software		375			678			101
Servers and network equipment		117,039			144,672			21,624
Motor vehicles		413			906			135
Leasehold improvements		3,480			6,820			1,020
		126,857			161,480			24,137
Less: accumulated depreciation		(72,224	)		(104,485	)		(15,617	)
Construction in progress		18			76			10
		54,651			57,071			8,530

Depreciation expense for the nine months ended September 30, 2009 and 2010 was as follows:

	For the nine months ended September 30,
	2009		2010		2010
	RMB		RMB		US$
	(Unaudited)		(Unaudited)		(Unaudited)
Depreciation expense		26,335		32,283		4,825

7. ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following:

	As of
	December 31, 2009		September 30, 2010		September 30, 2010
	RMB		RMB		US$
			(Unaudited)		(Unaudited)
Accrued advertising and promotion expenses		2,499		1,626		243
Accrued bonuses and individual income taxes		14,579		23,078		3,449
Accrued bandwidth and server hosting expenses		32,667		60,219		9,001
Accrued agency commissions		30,326		49,141		7,345
Accrued annual leave		838		945		141
Business tax and surcharges payable		6,919		10,725		1,603
Accrued financing issuance costs		—		12,611		1,885
Accrued initial public offering related costs		—		4,814		720
Others		3,745		5,767		862
		91,573		168,926		25,249

F-56

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

8. LONG-TERM DEBT

On July 13, 2010 (the “Closing Date”), the Company entered into a working capital loan and security agreement and a supplemental agreement (collectively known as the “Loan Agreement”) with independent third parties (the “Lenders”).

According to the Loan Agreement, the Lenders agreed to make term loans to the Company from time to time from the Closing Date in an aggregate principal amount not exceeding US$10,000. This loan agreement expired on October 31, 2010.

The Company or its wholly owned subsidiary, 1Verge Internet can use the loan for general corporate purposes.

The Lenders are entitled to receive a warrant instrument issued by the Company exercisable into a number of Series E Preferred Shares or the next round of preferred shares of the Company at the share issue price, such number of shares having an aggregate exercise price equal to the sum of (i) US$250 and (ii) the product of (A) 0.05 and (B) the original principal amount of each working capital loan advanced to the Company by the Lenders. Since the Company has issued Series F Preferred Shares on September 9, 2010, the next round preferred shares referred to in the Loan Agreement should be the Series F Preferred Shares.

In July 2010, the Company borrowed RMB33,875 (US$5,000). In connection with this borrowing, the Company issued a warrant, which was recognized as a liability at fair value, to the Lenders to purchase a number of Series E Preferred Shares or Series F Preferred Shares to be calculated at the pre-determined formula.

The principal and interest for the borrowings made under this Loan Agreement is to be repaid in full over a period of thirty-two months in equal, monthly installments, commencing after an initial four-month period of interest-only monthly payments. Interest is charged at a fixed interest rate of 12% per annum.

The total proceeds received for the debt is first allocated to the warrant based on its fair value at the time of issuance, and the remaining value is allocated to the debt. The resulting loan discount is amortized over the contractual life of the loans using the effective interest method.

Interest expense on these loans for the nine months ended September 30, 2009 and 2010 was RMB5,401 and RMB4,963 (US$742), which include RMB861 and RMB1,451 (US$217) of discount amortization, respectively. No interest expense has been capitalized in any periods presented.

Aggregate annual principal payments on long-term debt as of September 30, 2010 are as follows:

	RMB		US$
Within 1 year		28,651		4,282
Between 1 and 2 years		13,324		1,991
Between 2 and 3 years		11,611		1,735
		53,586		8,008

F-57

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

The Company has pledged its equity interest in 1Verge Internet to the Lenders for its obligation and liabilities under the loan agreement.

9. COST OF REVENUES

	For the nine months ended September 30,
	2009		2010		2010
	RMB		RMB		US$
	(Unaudited)		(Unaudited)		(Unaudited)
Business tax and surcharges		10,610		23,241		3,474
Bandwidth costs		111,299		139,994		20,924
Depreciation of servers and other equipment		24,506		29,008		4,336
Content costs		11,269		56,476		8,441
		157,684		248,719		37,175

10. INCOME TAXES

There was no current or deferred income tax expense for the nine months ended September 30, 2009 and 2010.

11. COMMITMENTS AND CONTINGENCIES

Operating lease commitments

The Group leases facilities in the PRC under non-cancelable operating leases expiring on different dates. Payments under operating leases are expensed on a straight-line basis over the periods of the respective leases, including a free-billing period of fourteen months.

For the nine months ended September 30, 2009 and 2010, total rental expenses for all operating leases amounted to RMB5,787 and RMB9,424 (US$1,409), respectively.

Future minimum payments under non-cancelable operating leases of office rental consist of the following as of September 30, 2010:

	RMB		US$
Within 1 year		12,102		1,809
Between 1 and 2 years		8,935		1,335
Between 2 and 3 years		5,692		851
After 3 years		3,675		549
		30,404		4,544

Total bandwidth rental expenses were recorded in cost of revenues (Note 9).

F-58

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Future minimum payments under non-cancelable operating leases of bandwidth rental consist of the following as of September 30, 2010:

	RMB		US$
Within 1 year		117,280		17,529
After 1 year		30,688		4,587
		147,968		22,116

Litigation

The Group is subject to legal proceedings, investigations and claims incidental to the conduct of its business from time to time. Although the results of unsettled litigation and claims cannot be predicted with certainty, the Group does not expect that the outcome of the matters referred to above will result in a material adverse effect on its business and condensed consolidated financial statements.

12. WARRANT LIABILITY

The warrants issued in connection with the Loan Agreement signed on April 23, 2008 and July 13, 2010 are exercisable at the option of the warrant holder, at any time or from time to time, commencing from the date of issuance and expiring on December 31, 2015 and October 31, 2020, respectively.

The warrants issued in relation to the long-term debt (Note 8) have been classified as a current liability from the issuance date under ASC topic 480, Distinguishing Liabilities from Equity: Overall, as holders are entitled to exercise into Series C Preferred Shares, Series E Preferred Shares, and Series F Preferred Shares at US$0.08113, US$0.19085, and US$0.49768 respectively, which are contingently redeemable upon a deemed liquidation event. Losses of RMB357 and RMB17,532 (US$2,620) from the change in fair market value of the warrants were recognized in the condensed consolidated statements of operations during the nine months ended September 30, 2009 and 2010, respectively.

The fair values of the warrants were estimated as of September 30, 2010 using a Black-Scholes option pricing model with the following assumptions:

	September 30, 2010
	Series C Preferred Shares			Series E Preferred Shares
Fair value per share (US$)		0.463			0.463
Exercise price (US$)		0.0811			0.1909
Risk-free interest rate		1.264	%		2.545	%
Dividend yield		—			—
Expected term		5.25 years			10.09 years
Expected volatility		50.4	%		61.3	%

F-59

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

No warrants were forfeited, cancelled or exercised in the nine months ended September 30, 2009 and 2010.

13. CONVERTIBLE REDEEMABLE PREFERRED SHARES

On November 4, 2005, the Company issued the first batch of 60,000,000 Series A convertible redeemable preferred shares with a conversion price of US$0.05 per share to third-party investors (“Series A Investors”) in exchange for total consideration of US$3,000. Simultaneously with the Company’s issuance of Series A preferred shares, the Company issued call options to the Series A Investors which allowed each Series A Investors to purchase additional Series A convertible redeemable preferred shares with an aggregate exercise price of US$1,500 and the Company’s ordinary shares with an aggregate exercise price of US$1,500. In addition, the Series A Investors granted a put option to the Company which allowed the Company to request that Series A Investors purchase additional Series A convertible redeemable preferred shares with an aggregate exercise price of US$1,500. On January 18, 2007, the Company issued an additional 22,500,000 Series A preferred shares at nil consideration. Concurrently, the Company and the Series A Investors also agreed to cancel the put and call options and effectively adjusted the conversion for all Series A convertible redeemable preferred shares to US$0.03636 per share.

On January 18, 2007, the Company issued 165,825,000 Series B convertible redeemable preferred shares with a conversion price of US$0.03636 per share to third-party investors in exchange for total consideration of US$6,030. Simultaneously with the Company’s issuance of Series B preferred shares, the Company granted a contingent purchase right to the investors of Series B preferred shares (“Series B Investors”) which allowed the Series B Investors to purchase additional Series B preferred shares. On July 27, 2007, the Company issued an additional 112,875,000 Series B convertible redeemable preferred shares with a conversion price of US$0.05333 per share for an aggregate purchase price of US$6,020 upon the exercise of the right.

On November 20, 2007, the Company issued 308,770,154 Series C convertible redeemable preferred shares with a conversion price of US$0.08113 per share to third-party investors in exchange for total consideration of US$25,050.

On June 20, 2008, the Company issued 209,737,212 Series D convertible redeemable preferred shares with a conversion price of US$0.14304 per share to third-party investors in exchange for total consideration of US$30,000.

On November 25, 2009, the Company issued 209,849,890 Series E convertible redeemable preferred shares with a conversion price of US$0.19085 per share to third-party investors in exchange for total consideration of US$40,050.

On September 9, 2010, the Company issued 100,465,709 Series F convertible redeemable preferred shares with a conversion price of US$0.49768 per share to third-party investors in exchange for total consideration of US$50,000

F-60

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Accounting for the Convertible Redeemable Preferred Shares

The Preferred Shares have been classified as mezzanine equity as they are redeemable upon a liquidation event, including a deemed liquidation event (e.g., change in control).

The holders of the Preferred Shares for all series have the ability to convert the shares into the Company’s ordinary shares. The conversion option did not require bifurcation because the feature is clearly and closely related to the host equity instrument. Additionally, the conversion option does not meet the net settlement criterion to be considered a derivative as the underlying ordinary shares are not publicly traded nor readily convertible into cash.

No beneficial conversion feature was recognized for the Preferred Shares as the fair value per ordinary share at each issuance date was less than the most favorable conversion price for each issuance.

14. ORDINARY SHARES

The Company’s Memorandum and Articles of Association, as amended, authorized the Company to issue 3,797,418,953 shares of US$0.00001 par value per ordinary share. Each ordinary share is entitled to one vote. The holders of ordinary shares are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to prior rights of holders of all other classes of shares outstanding. The Company issued 365,000,000 ordinary shares to the founder at the Company’s incorporation in 2005. As of September 30, 2010, there were 365,000,000 ordinary shares outstanding.

15. LOSS PER SHARE

Basic and diluted loss per share for the nine months ended September 30, 2009 and 2010 are calculated as follows:

	For the nine months ended September 30,
	2009			2010			2010
	RMB			RMB			US$
	(Unaudited)			(Unaudited)			(Unaudited)
Numerator:
Net loss		(136,301	)		(166,961	)		(24,954	)
Denominator:
Weighted-average ordinary shares outstanding—basic and diluted		365,268,611			365,675,115			365,675,115
Net loss per share—basic and diluted		(0.37	)		(0.46	)		(0.07	)

16. SHARE-BASED COMPENSATION

In December 2005, the Company adopted the 2006 Option Plan (the “Plan”). The Plan provides for the granting of share options to employees, officers, directors, advisors or consultants of the

F-61

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Company. These options were granted with exercise prices denominated in U.S. dollars, which is the functional currency of the Company. The Company has reserved 140,441,231 ordinary shares for issuance under the Plan. The maximum term of any issued stock option is ten years from the grant date. These awards vest over a four-year schedule for employees, officers and directors as stated below:

(1) One-sixth of the options shall be vested upon the first anniversary of the grant date;

(2) One-twelfth of the options shall be vested upon the last day of each three-month period of the second and third year after the grant date; and

(3) One-twenty fourth of the options shall be vested upon the last day of each three-month period of the fourth year after the grant date.

In accordance with ASC 718-10, all share-based payments to employees are measured in the consolidated financial statements based on their grant-date fair values. Compensation expense is recognized on a straight-line basis, net of estimated forfeiture over the requisite service period with a graded vesting schedule.

The following table summarizes the stock option activity for the nine months ended September 30, 2010:

Share options	Number of shares			Weighted- average exercise price (US$)		Weighted- average grant-date fair value (US$)		Weighted- average remaining contractual life (years)		Aggregate Intrinsic value (US$)
Outstanding, January 1, 2010		93,722,333			0.0710		0.0330		7.76		9,180
Granted		40,758,600			0.2939		0.1588
Exercised*		(158,875	)		0.0959		0.0405
Forfeited		(5,570,157	)		0.1494		0.0722
Outstanding, September 30, 2010		128,751,901			0.1381		0.0711		7.69		41,844
Vested and expected to vest at September 30, 2010		122,111,667			0.1306				7.61		40,596
Exercisable at September 30, 2010		65,271,042			0.0518				6.57		26,847

* Represents options exercised but the corresponding shares not yet issued

Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Based upon the Company’s historical and expected forfeitures for stock options granted, the Company estimated that its future forfeiture rate would be 11% for employees and 1.33% for senior management.

The aggregate intrinsic value in the table above represents the difference between the fair value of the Company’s ordinary shares as of September 30, 2010 and the exercise price.

Total intrinsic value of options exercised as of September 30, 2010 was US$58.

F-62

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

Total fair value of options vested as of September 30, 2010 was US$626.

As of September 30, 2010, there was RMB42,345 (US$6,329) of unrecognized share-based compensation cost related to stock options, which is expected to be recognized over a weighted average vesting period of 3.48 years. To the extent the actual forfeiture rate is different from the Company’s estimate, actual share-based compensation related to these awards may be different from the expectation.

The binomial option pricing model is used to determine the fair value of the stock options granted to employees. The binomial model requires the input of highly subjective assumptions, including the expected stock price volatility and the sub-optimal early exercise factor. For expected volatilities, the Company has made reference to historical volatilities of several comparable companies. The sub-optimal early exercise factor was estimated based on the vesting and contractual terms of the awards and management’s expectation of exercise behavior of the grantees. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The fair values of stock options granted during the nine months ended September 30, 2010 were estimated using the following weighted-average assumptions:

	For the nine months ended September 30, 2010
Risk-free interest rate		2.963 to 3.86	%
Dividend yield		—
Volatility rate		61.8% to 63.0	%
Sub-optimal early exercise factor		2 times

Total compensation cost recognized for the nine months ended September 30, 2009 and 2010 are as follows:

	For the nine months ended September 30,
	2009		2010		2010
	RMB		RMB		US$
	(Unaudited)		(Unaudited)		(Unaudited)
Cost of revenues		206		550		82
Product development		1,206		2,038		305
Sales and marketing		1,161		3,645		545
General and administrative		675		1,142		170
		3,248		7,375		1,102

17. FAIR VALUE MEASUREMENTS

ASC 820-10, Fair Value Measurements and Disclosures, establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets

Level 2—Include other inputs that are directly or indirectly observable in the marketplace

Level 3—Unobservable inputs which are supported by little or no market activity

F-63

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

In accordance with ASC 820-10, the Group measures the fair value of time deposits in cash equivalents using the discounted cash flow model with market interest rates as a discount curve. Time deposits are classified as Level 2.

The preferred share warrants are measured at fair value, and are classified as Level 3 by using the income approach based on inputs that are unobservable in the market.

18. SUBSEQUENT EVENTS

Amendment to Memorandum and Articles of Association

In November 2010, the Company adopted the Amended and Restated Memorandum and Articles of Association (“M&AA”). Immediately prior to the completion of a Qualified Public Offering, the share capital of the Company is US$50, will be divided into 5,000,000,000 shares of par value US$0.00001 each, comprising (i) 3,137,657,746 Class A ordinary shares; (ii) 659,761,207 Class B ordinary shares; (iii) 82,500,000 Series A Preferred Shares; (iv) 165,825,000 Series B-1 Preferred Shares and 112,875,000 Series B-2 Preferred Shares; (v) 317,398,462 Series C Preferred Shares; (vi) 209,737,212 Series D Preferred Shares; (vii) 213,779,664 Series E Preferred Shares; and (viii) 100,465,709 Series F Preferred Shares. The outstanding preferred shares will be automatically converted into Class A ordinary shares or Class B ordinary shares, as the case may be, immediately prior to the closing of a Qualified Public Offering.

After the completion of a Qualified Public Offering, the ordinary shares will consist of Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. Subject to certain exceptions, in respect of matters requiring shareholders’ vote, each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to three votes. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any transfer of Class B ordinary shares by a holder thereof to any person or entity which is not an affiliate of such holder, such Class B ordinary shares shall be automatically and immediately converted into the equal number of Class A ordinary shares.

2010 Share Incentive Plan

In November 2010, the Company adopted the 2010 Share Incentive Plan. The plan permits the grant of options to purchase the Company’s Class A ordinary shares, restricted shares and restricted share units as deemed appropriate by the administrator under the plan. The maximum aggregate number of Class A ordinary shares that may be issued pursuant to all awards under this plan is 100,000,000 shares. As of November 12, 2010, the Company has not granted any awards under this plan.

Others

In November 2010, the Company granted 11,487,000 share options to employees and an independent director with an exercise price of US$0.48 under the 2006 Option Plan.

F-64

YOUKU.COM INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2010—continued

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)

In November 2010, the holders of the warrants notified the Company that they will exercise their warrants to purchase 8,523,082 Series C Preferred Shares and 3,929,774 Series E Preferred Shares immediately prior to the completion of the initial public filing.

19. PRO FORMA LOSS PER SHARE

All outstanding preferred shares (Note 13) will be converted automatically into ordinary shares upon the completion of a Qualified Public Offering. Assuming the conversion had occurred on January 1, 2010, based on existing terms of the Preferred Shares as of September 30, 2010, the pro forma basic and diluted loss per share for the nine months ended September 30, 2010 are calculated as follows:

	For the nine months ended September 30,
	2010			2010
	RMB			US$
	(Unaudited)			(Unaudited)
Numerator:
Net loss		(166,961	)		(24,954	)
Denominator
Number of shares outstanding		365,675,115			365,675,115
Conversion of convertible redeemable preferred shares to ordinary shares		1,190,022,965			1,190,022,965
Denominator for pro forma basic and diluted net loss per share		1,555,698,080			1,555,698,080
Pro forma basic and diluted net loss per share		(0.11	)		(0.02	)

F-65

             American Depositary Shares

Youku.com Inc.

Representing              Class A Ordinary Shares

Goldman Sachs (Asia) L.L.C.

Allen & Company LLC

Piper Jaffray Pacific Crest Securities

Through and including                     , 2010 (the 25^th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences or committing a crime. Our articles of association provide for indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such, except through their own willful neglect or default.

Pursuant to the indemnification agreements the form of which is filed as Exhibit              to this Registration Statement, we will agree to indemnify our directors and officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or officer.

The underwriting agreement, the form of which is filed as Exhibit 1.1 to this Registration Statement, will also provide for indemnification by the underwriters of us and our officers and directors for certain liabilities, including liabilities arising under the Securities Act, but only to the extent that such liabilities are caused by information relating to the underwriters furnished to us in writing expressly for use in this registration statement and certain other disclosure documents.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

ITEM 7. RECENT SALES OF UNREGISTERED SECURITIES.

During the past three years, we have issued the following securities (including options to acquire our ordinary shares) that were outstanding as of November 12, 2010.

Purchaser	Date of Issuance	Number of Securities	Consideration (US$)
Series C Preferred Share Investors(1)	November 20, 2007	308,770,154 Series C Preferred Shares	US$25,050,000
Venture Lending & Leasing IV, Inc. and Venture Lending & Leasing V, Inc.	Various dates(4)	Warrants to purchase 8,523,082 Series C Preferred Shares(4)	Loan commitment of US$9,756,098.
Series D Preferred Share Investors(2)	June 20, 2008	209,737,212 Series D Preferred Shares	US$30,000,000
Series E Preferred Share Investors(3)	November 25, 2009	209,849,890 Series E Preferred Shares	US$40,050,000
Series F Preferred Shares Investors(5)	September 9, 2010	100,465,709 Series F Preferred Shares	US$50,000,000
Directors, Officers, Consultants, Advisors and Employees	Various dates(6)	Options to purchase 139,520,233 ordinary shares(6)	Services to our company

(1) Include Chengwei Funds, Farallon Funds, certain Sutter Hill Funds and Brookside.

(2) Include Chengwei Funds, Farallon Funds, Maverick Funds, certain Sutter Hill Funds, VLLIV, VLLV and Brookside.

II-1

(3) Include Chengwei Funds, certain Maverick Funds, certain Sutter Hill Funds and Brookside.

(4) On April 23, 2008, we issued 4,314,154 warrants. On May 1, 2008, we issued 1,941,368 warrants and the principal amount drawn down was US$4,500,000. On June 2, 2008, we issued 603,980 warrants and the principal amount drawn down was US$1,400,000. On September 2, 2008, we issued 1,121,680 warrants and the principal amount drawn down was US$2,600,000. On January 1, 2009, we issued 336,504 warrants and the principal amount drawn down was US$780,000. On January 30, 2009, we issued 205,396 warrants and the principal amount drawn down was US$476,098.

(5) Include Chengwei Funds, Farallon Funds, Brookside, Maverick USA II, Corp. and certain entities affiliated with T. Rowe Price New Horizons Fund, Inc. and Morgan Stanley Investment Management Small Company Growth Trust.

(6) On December 1, 2005, we issued 9,965,000 options. On February 1, 2006, we issued 5,070,000 options. On April 1, 2006, we issued 1,536,000 options. On June 1, 2006, we issued 1,075,000 options. On August 1, 2006, we issued 4,247,500 options. On October 1, 2006, we issued 985,000 options. On February 1, 2007, we issued 21,702,500 options. On July 1, 2007, we issued 16,425,000 options. On December 6, 2007, we issued 500,000 options. On January 21, 2008, we issued 1,000,000 options. On March 1, 2008, we issued 19,722,000 options. On August 1, 2008, we issued 2,360,000 options. On September 22, 2008, we issued 1,500,000 options. On February 1, 2009, we issued 11,530,000 options. On February 21, 2009, we issued 200,000 options. On August 1, 2009, we issued 12,243,000 options. On February 1, 2010, we issued 20,679,600 options. On August 1, 2010, we issued 20,079,000 options. On November 10, we issued 11,487,000 options. As of September 30, 2010 and November 12, 2010, 22,067,699 and 22,786,367, respectively, options had been forfeited, cancelled or exercised but not issued respectively on these dates.

We believe that each of the above issuances was exempt from registration under the Securities Act in reliance on Regulation S under the Securities Act, Section 4(2) of the Securities Act or Rule 701 under the Securities Act regarding transactions not involving a public offering. The grants of stock options on various dates were made to some of our directors, officers and employees pursuant to our 2006 Stock Option Scheme adopted in 2005. See “Management—2006 Stock Option Scheme” for a description of the principal terms of the plan. The aggregate amount of ordinary shares underlying the stock options granted during any consecutive 12-month period has not exceeded 15% of our outstanding ordinary shares (including ordinary shares into which the preferred shares will automatically convert immediately upon the completion of this offering) as of December 31, 2009. No underwriters were involved in any of these issuances.

ITEM 8. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

See Exhibit Index beginning on page II-6 of this registration statement.

The agreements included as exhibits to this registration statement contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties were made solely for the benefit of the other parties to the applicable agreement and (i) were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) may have been qualified in such agreement by disclosures that were made to the other party in connection with the negotiation of the applicable agreement; (iii) may apply contract standards of “materiality” that are different from “materiality” under the applicable securities laws; and (iv) were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement.

We acknowledge that, notwithstanding the inclusion of the foregoing cautionary statements, we are responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this registration statement not misleading.

(b) Financial Statement Schedules

Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the Consolidated Financial Statements or the Notes thereto.

II-2

ITEM 9. UNDERTAKINGS.

The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 6, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant under Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Beijing, China, on November 15, 2010.

Youku.com Inc.
By:	/s/ Victor Wing Cheung Koo
Name:	Victor Wing Cheung Koo
Title:	Chairman of the Board of Directors and Chief Executive Officer

II-4

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints each of Victor Wing Cheung Koo and Dele Liu as attorneys-in-fact with full power of substitution, for him or her in any and all capacities, to do any and all acts and all things and to execute any and all instruments which said attorney and agent may deem necessary or desirable to enable the registrant to comply with the Securities Act of 1933, as amended (the “Securities Act”), and any rules, regulations and requirements of the Securities and Exchange Commission thereunder, in connection with the registration under the Securities Act of ordinary shares of the registrant (the “Shares”), including, without limitation, the power and authority to sign the name of each of the undersigned in the capacities indicated below to the Registration Statement on Form F-1 (the “Registration Statement”) to be filed with the Securities and Exchange Commission with respect to such Shares, to any and all amendments or supplements to such Registration Statement, whether such amendments or supplements are filed before or after the effective date of such Registration Statement, to any related Registration Statement filed pursuant to Rule 462(b) under the Securities Act, and to any and all instruments or documents filed as part of or in connection with such Registration Statement or any and all amendments thereto, whether such amendments are filed before or after the effective date of such Registration Statement; and each of the undersigned hereby ratifies and confirms all that such attorney and agent shall do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on November 15, 2010.

Signature	Title
/s/ Victor Wing Cheung Koo Name: Victor Wing Cheung Koo	Chairman of the Board of Directors and Chief Executive Officer (principal executive officer)
/s/ Dele Liu Name: Dele Liu	Director, Chief Financial Officer and Senior Vice President (principal financial and accounting officer)
/s/ George Leonard Baker Jr. Name: George Leonard Baker Jr.	Director
/s/ Jonathan Jia Zhu Name: Jonathan Jia Zhu	Director
/s/ Ye Sha Name: Ye Sha	Director
/s/ Nicholas Frederick Lawler Name: Nicholas Frederick Lawler	Director
/s/ Bryan Zongwei Li Name: Bryan Zongwei Li	Director
/s/ Kate Ledyard Name: Kate Ledyard Title:    Manager  Law Debenture Corporate Services Inc.	Authorized U.S. Representative on behalf of Law Debenture Corporate Services Inc.

II-5

YOUKU.COM INC.

EXHIBIT INDEX

Exhibit Number	Description of Document
1.1*	Form of Underwriting Agreement
3.1	Amended and Restated Memorandum and Articles of Association of the Registrant, as currently in effect
3.2*	Form of Amended and Restated Memorandum and Articles of Association of the Registrant (effective upon the completion of this offering)
4.1*	Registrant’s Specimen American Depositary Receipt (included in Exhibit 4.3)
4.2	Registrant’s Specimen Certificate for Ordinary Shares
4.3*	Form of Deposit Agreement, among the Registrant, the depositary and holder of the American Depositary Receipts
4.4	Amended and Restated Shareholders’ Agreement, among the Registrant and other parties therein dated as of September 9, 2010
4.5	Share Purchase Agreement, among the Registrant and other parties therein dated as of November 25, 2009
4.6	Share Purchase Agreement, among the Registrant and other parties therein dated as of September 9, 2010
5.1	Form of Opinion of Appleby regarding the validity of the ordinary shares being registered and certain Cayman Islands tax matters
8.1	Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding certain U.S. tax matters
8.2	Form of Opinion of TransAsia Lawyers regarding certain PRC tax matters
10.1	2006 Stock Option Scheme, as amended
10.2	2010 Share Incentive Plan
10.3	Form of Indemnification Agreement between the Registrant and its directors and officers
10.4	Form of Employment Agreement between the Registrant and the officers of the Registrant
10.5	Amended and Restated Business Operations Agreement, dated as of August 16, 2010, among 1Verge Internet, 1Verge Information and the shareholders of 1Verge Information
10.6	Amended and Restated Business Operations Agreement, dated as of August 16, 2010, among 1Verge Internet, Jiaheyi and the shareholders of Jiaheyi
10.7	Amended and Restated Equity Interest Pledge Agreement, dated as of August 16, 2010, among 1Verge Internet and the shareholders of 1Verge Information
10.8	Amended and Restated Equity Interest Pledge Agreement, dated as of September 27, 2010, among 1Verge Internet and the shareholders of Jiaheyi
10.9	Power of Attorney, dated as of August 16, 2010, by the shareholders of 1Verge Information
10.10	Power of Attorney, dated as of August 16, 2010, by the shareholders of Jiaheyi
10.11	Amended and Restated Exclusive Technical and Consulting Services Agreement, dated as of August 16, 2010, between 1Verge Internet and 1Verge Information
10.12	Amended and Restated Exclusive Technical and Consulting Services Agreement, dated as of August 16, 2010, between 1Verge Internet and Jiaheyi
10.13	Amended and Restated Trademark License Agreement, dated as of August 16, 2010, between 1Verge Internet and 1Verge Information

II-6

Exhibit Number	Description of Document
10.14	Amended and Restated Domain Name License Agreement, dated as of August 16, 2010, between 1Verge Internet and 1Verge Information
10.15	Amended and Restated Equity Option Agreement, dated as of August 16, 2010, among 1Verge Internet and the shareholders of 1Verge Information
10.16	Amended and Restated Equity Option Agreement, dated as of August 16, 2010, among 1Verge Internet and the shareholders of Jiaheyi
10.17	Amended and Restated Loan Agreement, dated as of August 16, 2010, among 1Verge Internet and the shareholders of 1Verge Information
10.18	Amended and Restated Loan Agreement, dated as of August 16, 2010, among 1Verge Internet and the shareholders of Jiaheyi
10.19	Supplementary Agreement, dated as of August 16, 2010, between 1Verge Internet and 1Verge Information
10.20	Supplementary Agreement, dated as of August 16, 2010, between 1Verge Internet and Jiaheyi
10.21	Assignment Agreement I, dated as of August 16, 2010, among 1Verge Internet, 1Verge Information, Jiaheyi, Qin Qiong and Liu Dele
10.22	Assignment Agreement II, dated as of August 16, 2010, among 1Verge Internet, 1Verge Information, Jiaheyi, Qin Qiong and Liu Dele
21.1	Subsidiaries of the Registrant
23.1	Consent of Ernst & Young Hua Ming, an independent registered public accounting firm
23.2	Consent of Appleby (included in Exhibit 5.1)
23.3	Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 8.1)
23.4	Consent of TransAsia Lawyers
23.5	Consent of American Appraisal China Limited
24.1	Powers of Attorney (included on signature page)
99.1	Code of Business Conduct and Ethics of the Registrant
99.2	Form of Opinion of TransAsia Lawyers, counsel to Youku.com Inc., regarding certain PRC legal matters

* To be filed by amendment.

II-7

EX-3.1

Exhibit 3.1

Company No.: CR-155136

AMENDED AND RESTATED

MEMORANDUM

AND

ARTICLES OF ASSOCIATION

OF

Youku.com Inc.

Amended and restated by Shareholders’ Special Resolution dated 12 November 2010

Incorporated on the 20th day of September, 2005

INCORPORATED IN THE CAYMAN ISLANDS

THE COMPANIES LAW (2010 Revision)

Company Limited by Shares

AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION

OF

Youku.com Inc.

(adopted pursuant to Shareholders Special Resolution dated 12 November 2010)

NAME

1. The name of the Company is Youku.com Inc.

REGISTERED OFFICE

2. The Registered Office of the Company shall be at the offices of Appleby Trust (Cayman) Ltd., Clifton House, 75 Fort Street, PO Box 1350, Grand Cayman KY1-1108, Cayman Islands or at such other place as the Directors may from time to time decide.

GENERAL OBJECTS

3. The objects for which the Company is established are unrestricted and shall include, but without limitation, the following:

(a) (i) To carry on the business of an investment company and to act as promoters and entrepreneurs and to carry on business as financiers, capitalists, concessionaires, merchants, brokers, traders, dealers, agents, importers and exporters and to undertake and carry on and execute all kinds of investment, financial, commercial, mercantile, trading and other operations.

(ii) To carry on whether as principals, agents or otherwise howsoever the business of realtors, developers, consultants, estate agents or managers, builders, contractors, engineers, manufacturers, dealers in or vendors of all types of property, including services.

(b) To exercise and enforce all rights and powers conferred by or incidental to the ownership of any shares, stock, obligations or other securities including without prejudice to the generality of the foregoing all such powers of veto or control as may be conferred by virtue of the holding by the Company of some special proportion of the issued or nominal amount thereof, to provide managerial and other executive, supervisory and consultant services for or in relation to any company in which the Company is interested upon such terms as may be thought fit.

(c) To purchase or otherwise acquire, to sell, exchange, surrender, lease, mortgage, charge, convert, turn to account, dispose of and deal with real and personal property and rights of all kinds and, in particular, mortgages, debentures, produce, concessions, options, contracts, patents, annuities, licences, stocks, shares, bonds, policies, book debts, business concerns, undertakings, claims, privileges and choses in action of all kinds.

(d) To subscribe for, conditionally or unconditionally, to underwrite, issue on commission or otherwise, take, hold, deal in and convert stocks, shares and securities of all kinds and to enter into partnership or into any arrangement for sharing profits, reciprocal concessions or cooperation with any person or company and to promote and aid in promoting, to constitute, form or organize any company, syndicate or partnership of any kind, for the purpose of acquiring and undertaking any property and liabilities of the Company or of advancing, directly or indirectly, the objects of the Company or for any other purpose which the Company may think expedient.

(e) To stand surety for or to guarantee, support or secure the performance of all or any of the obligations of any person, firm or company whether or not related or affiliated to the Company in any manner and whether by personal covenant or by mortgage, charge or lien upon the whole or any part of the undertaking, property and assets of the Company, both present and future, including its uncalled capital or by any such method and whether or not the Company shall receive valuable consideration thereof.

(f) To engage in or carry on any other lawful trade, business or enterprise which may at any time appear to the Directors of the Company capable of being conveniently carried on in conjunction with any of the aforementioned businesses or activities or which may appear to the Directors or the Company likely to be profitable to the Company.

In the interpretation of this Memorandum of Association in general and of this clause 3 in particular, no object, business or power specified or mentioned shall be limited or restricted by reference to or inference from any other object, business or power, or the name of the Company, or by the juxtaposition of two or more objects, businesses or powers and that, in the event of any ambiguity in this clause or elsewhere in this Memorandum of Association, the same shall be resolved by such interpretation and construction as will widen and enlarge and not restrict the objects, businesses and powers of and exercisable by the Company.

GENERAL POWERS

4. Except as prohibited or limited by the Companies Law (2010 Revision), the Company shall have full power and authority to carry out any object and shall have and be capable of from time to time and at all times exercising any and all of the powers at any time or from time to time exercisable by a natural person or body corporate in doing in any part of the world whether as principal, agent, contractor or otherwise whatever may be considered by it necessary for the attainment of its objects and whatever else may be considered by it as incidental or conducive thereto or consequential thereon, including, but without in any way restricting the generality of the foregoing, the power to make any alterations or amendments to this Memorandum of Association and the Articles of Association of the Company considered necessary or convenient in the manner set out in the Articles of Association of the Company, and the power to do any of the following acts or things, viz: to pay all expenses of and incidental to the promotion, formation and incorporation of the Company; to register the Company to do business in any other jurisdiction; to sell, lease or dispose of any property of the Company; to draw, make, accept, endorse, discount, execute and issue promissory notes, debentures, bills of exchange, bills of lading, warrants and other negotiable or transferable instruments; to lend money or other assets and to act as guarantors; to borrow or raise money on the security of the undertaking or on all or any of the assets of the Company including uncalled capital or without security; to invest monies of the Company in such manner as the Directors determine; to promote other companies; to sell the undertaking of the Company for cash or any other consideration; to distribute assets in specie to Members of the Company; to make charitable or benevolent donations; to pay pensions or gratuities or provide other benefits in cash or kind to Directors, officers, employees, past or present and their families; to purchase Directors and officers liability insurance and to carry on any trade or business and generally to do all acts and things which, in the opinion of the Company or the Directors, may be conveniently or profitably or usefully acquired and dealt with, carried on, executed or done by the Company in connection with the business aforesaid PROVIDED THAT the Company shall only carry on the businesses for which a licence is required under the laws of the Cayman Islands when so licensed under the terms of such laws.

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LIMITATION OF LIABILITY

5. The liability of each Member is limited to the amount from time to time unpaid on such Member’s shares.

CURRENCY

6. Shares in the Company shall be issued in the currency of the United States of America.

AUTHORIZED CAPITAL

7. The authorized capital of the Company is US$50,000.

CLASSES, NUMBER AND PAR VALUE OF SHARES

8. The Company is authorized to issue two classes of stock to be designated, respectively, Preferred Shares (“Preferred Shares”) and Ordinary Shares (the “Ordinary Shares”). The authorized share capital of the Company, being US$50,000, is divided into 5,000,000,000 shares of par value US$0.00001 each, comprising (i) 3,797,418,953 Ordinary Shares; (ii) 82,500,000 Series A Preferred Shares (the “Series A Preferred Shares”); (iii) 165,825,000 Series B-1 Preferred Shares (the “Series B-1 Preferred Shares”) and 112,875,000 Series B-2 Preferred Shares (the “Series B-2 Preferred Shares” together with Series B-1 Preferred Shares may hereinafter be referred to as the “Series B Preferred Shares”); (iv) 317,398,462 Series C Preferred Shares (the “Series C Preferred Shares”); (v) 209,737,212 Series D Preferred Shares (the “Series D Preferred Shares”); (vi) 213,779,664 Series E Preferred Shares (the “Series E Preferred Shares”); and (vii) 100,465,709 Series F Preferred Shares (the “Series F Preferred Shares”).

9. Immediately prior to the completion of a Qualified Public Offering (as defined below), the authorized share capital of the Company, being US$50,000, will be divided into 5,000,000,000 shares of par value US$0.00001 each, comprising (i) 3,137,657,746 Class A Ordinary Shares; (ii) 659,761,207 Class B Ordinary Shares; (iii) 82,500,000 Series A Preferred Shares; (iv) 165,825,000 Series B-1 Preferred Shares and 112,875,000 Series B-2 Preferred Shares; (v) 317,398,462 Series C Preferred Shares; (vi) 209,737,212 Series D Preferred Shares; (vii) 213,779,664 Series E Preferred Shares; and (viii) 100,465,709 Series F Preferred Shares. “Qualified Public Offering” means a public offering by the Company of its Class A Ordinary Shares pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended, pursuant to a firm underwriting commitment, in which the gross proceeds to the Company from the public offering shall exceed US$70,000,000 and after which the Class A Ordinary Shares are listed on the New York Stock Exchange or the Nasdaq Global Market, or in a similar public offering of Class A Ordinary Shares in a jurisdiction and on a securities exchange outside of the United States of similar international stature, including the Hong Kong Stock Exchange, provided such public offering in terms of offering proceeds is reasonably equivalent to the aforesaid public offering in the United States.

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THE COMPANIES LAW (2010 Revision)

Company Limited by Shares

AMENDED AND RESTATED

ARTICLES OF ASSOCIATION

OF

Youku.com Inc.

(adopted by Shareholders’ Special Resolution dated 12 November 2010)

1. In these Articles, Table A in the Schedule to the Statute does not apply and, unless there be something in the subject or context inconsistent therewith,

“Affiliate” with regard to a given Person, means a Person that controls, is controlled by or is under common control with the given Person. For purposes of this Agreement, except as otherwise expressly provided, when used with respect to any Person, “control” means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “affiliated”, “controlling” and “controlled” have meanings correlative to the foregoing.

“Automatic Conversion” has the meaning as set forth in Article 5.2.2.1(2).

“Articles” means these Amended and Restated Articles of Association, as from time to time altered by Special Resolution.

“Auditors” means the persons for the time being performing the duties of auditors of the Company.

“Brookside” means Brookside Capital Partners, L.P.

“Board” means the board of directors of the Company.

“Business Day” means a Business Day (other than a Saturday or Sunday) on which licensed banks are generally open in the PRC or New York, USA for general banking business.

“Class A Ordinary Shares” means Class A Ordinary Share of a par value of US$0.00001 each in the share capital of the Company.

“Class B Ordinary Shares” means Class B Ordinary Shares of a par value of US$0.00001 each in the share capital of the Company.

“Chengwei Ventures” means collectively Chengwei Partners, L.P., Chengwei Ventures Evergreen Fund, L.P. and Chengwei Ventures Evergreen Advisors Fund, LLC.

“Company” means the above named Company.

“Consideration Per Share” has the meaning as set forth in Article 5.2.2.8.

“a Constitution” has the meaning as set forth in Article 5.2.2.9.

“Conversion Event” has the meaning set forth in Article 5.2.2.9.

“Conversion Price” shall initially be, with respect to each series of Preferred Shares, the Original Issue Price for such series of Preferred Shares. The Conversion Price with respect to each series of Preferred Shares is subject to adjustment as set forth in Article 5.2.2.

“Conversion Ratio” has the meaning set forth in Article 5.2.2.1(1).

“Conversion Right” has the meaning set forth in Article 5.2.2.1(1).

“Conversion Shares” has the meaning set forth in Article 5.2.2.1(2).

“debenture” means debenture stock, mortgages, bonds and any other such securities of the Company whether constituting a charge on the assets of the Company or not.

“Directors” means the directors for the time being of the Company.

“dividend” includes bonus.

“Equity Control and Service Agreement(s)” means the equity control and service agreements attached hereto as Exhibit B.

“Equity Securities” means any Ordinary Shares or Ordinary Share Equivalents.

“ESOP” means the Employee Share Option Scheme as in effect at the time of the original issuance of the Series D Preferred Shares.

“Farallon” means Farallon Capital Partners, L.P., Farallon Capital Institutional Partners, L.P., Farallon Capital Institutional Partners II, L.P., Farallon Capital Institutional Partners III, L.P., Farallon Capital Offshore Investors II, L.P.

“Holder(s)” means the holders of the Preferred Shares, i.e. persons registered in the Company’s register of members as the holders of Preferred Shares, and a permitted transferee and assignee of any Holder.

“Initial Consideration” has the meaning set forth in Articles 5.2.4.3(5).

“Leland Stanford” shall mean The Board of Trustees of the Leland Stanford Junior University (DAPER 1) and The Board of Trustees of the Leland Stanford Junior University (SBST).

“Liquidation Event” shall have the meaning set forth in Article 5.2.4.1.

“Maverick” shall mean, collectively, Maverick Fund Private Investments, Ltd., Maverick USA II, Corp., and Maverick II Holdings, Ltd.;

“Member” shall bear the meaning as ascribed to it in the Statute.

“month” means calendar month.

“Morgan Stanley” means Morgan Stanley Investment Management Inc.

“Morgan Stanley Holder” means a Holder that holds its Preferred Shares through a Morgan Stanley discretionary client account.

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“New Securities” shall mean any Equity Securities issued in the capital of the Company after the date of these Articles; provided that the term “New Securities” does not include (i) Ordinary Shares issued upon conversion of the Preferred Shares; (ii) 140,441,231 Ordinary Shares, either issued as restricted stock awards or options exercisable for Ordinary Shares (subject to appropriate adjustment for stock splits, stock dividends, combinations and other similar recapitalizations affecting such Equity Securities) issued or issuable to employees, professional consultants, officers or Directors of the Company under the ESOP; (iii) securities issued in connection with the warrants issued to Venture Lending & Leasing IV, LLC and Venture Lending & Leasing V, LLC for the purchase of up to 8,523,082 Series C Preferred Shares, or in connection with the warrants issued to Venture Lending & Leasing V, LLC and Venture Lending & Leasing VI, LLC for the purchase of up to 3,929,774 Series E Preferred Shares; (iv) securities issued in a Qualified Public Offering; and (v) securities issued in connection with any stock split, stock dividend, stock division, stock combinations, or re-capitalization of the Company for which adjustments are made pursuant to Article 5.2.2.7(1) or (2).

“non-electing share” has the meaning as set forth in Article 5.2.2.9.

“Option” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Equity Securities.

“Optional Conversion Shares” has the meaning as set forth in Article 5.2.2.1(1).

“Ordinary Share Equivalents” means warrants, options and rights directly or indirectly exercisable for Ordinary Shares and instruments, including without limitation the Preferred Shares, directly or indirectly convertible or exchangeable for Ordinary Shares.

“Ordinary Shares” means, until the time immediately prior to the completion of a Qualified Public Offering, the Ordinary Shares of a par value of US$0.00001 each in the share capital of the Company and, immediately after the completion of a Qualified Public Offering, collectively, Class A Ordinary Shares and Class B Ordinary Shares.

“ordinary shareholder” means the holder of Ordinary Shares.

“Original Issue Date” shall mean the date on which a share of Series F Preferred Shares was first issued.

“Original Issue Price” means US$0.05 for Series A Preferred Shares, US$0.03636364 for the Series B-1 Preferred Shares, US$0.05333333 for the Series B-2 Preferred Shares, US$0.081128308 for the Series C Preferred Shares, US$0.143036134 for the Series D Preferred Shares, US$.190850707 for the Series E Preferred Shares and US$0.49768225 for the Series F Preferred Shares, or the aggregate amount of the issue price based on such price per share where the context requires and where applicable.

“paid-up” means paid-up and/or credited as paid-up.

“Person” means any individual, person corporate, corporation, partnership, limited partnership, proprietorship, association, limited liability company, firm, trust, estate or enterprise or entity.

“Preferred Shareholder” means the persons registered in the Company’s register of members as the holders of Preferred Shares, and the permitted transferees and assigns of any Preferred Shareholder.

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“Preferred Shares” means the Series A Preferred Shares, the Series B-1 Preferred Shares, the Series B-2 Preferred Shares, the Series C Preferred Shares, the Series D Preferred Shares, the Series E Preferred Shares and the Series F Preferred Shares.

“Qualified Public Offering” means a public offering by the Company of its Class A Ordinary Shares pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act pursuant to a firm underwriting commitment, in which the gross proceeds to the Company from the public offering shall exceed US$70,000,000 and after which the Class A Ordinary Shares are listed on the New York Stock Exchange or the Nasdaq Global Market, or in a similar public offering of Ordinary Shares in a jurisdiction and on a securities exchange outside of the United States of similar international stature, including the Hong Kong Stock Exchange, provided such public offering in terms of offering proceeds is reasonably equivalent to the aforesaid public offering in the United States.

“Register of Members” has the meaning set forth in Article 9.

“registered office” means the registered office for the time being of the Company.

“Required Holders” means the Holders of at least 2/3 of the votes attributable to the then outstanding Preferred Shares (voting together on an as converted basis).

“Requisite Approval” has the meaning set forth in Article 5.2.5.2.

“Sale Transaction” means a reorganization, merger, consolidation, tender offer, share transfer or other business combination effected by means of one transaction or a series of related transactions, which results in the voting securities outstanding immediately preceding such transaction or series of transactions or the voting securities issued with respect to the voting securities of the Company outstanding immediately preceding such transaction or series of transactions representing immediately thereafter less than fifty percent (50%) of the combined voting power of the voting securities of the Company or the surviving entity, as the case may be, immediately following such transaction or series of transactions, or a sale, lease, encumbrance, disposition, license or other conveyance of all or substantially all of the assets of the Company (including, without limitation, contractual rights held by the Company), or the sale or disposition (whether by merger or otherwise) of one or more Subsidiaries of the Company if substantially all of the assets of the Company and its Subsidiaries taken as a whole are held by such Subsidiary or Subsidiaries.

“Seal” means the common seal of the Company and includes every duplicate seal.

“Secretary” includes an Assistant Secretary and any person appointed to perform the duties of Secretary of the Company.

“Securities Act” means the Securities Act of 1933, as amended.

“Series C Holders” means holders of the Series C Preferred Shares.

“Series D Holders” means holders of the Series D Preferred Shares.

“Series E Holders” means holders of the Series E Preferred Shares.

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“Series F Holders” means holders of the Series F Preferred Shares.

“share” includes a fraction of a share.

“Shareholder(s)” means a holder of share(s) of the Company from time to time.

“Special Resolution” has the same meaning as in the Statute and includes a resolution approved in writing as described therein.

“Statute” means the Companies Law of the Cayman Islands as amended and every statutory modification or re-enactment thereof for the time being in force.

“Sutter Hill” means collectively Sutter Hill Ventures, David L. Anderson, Anvest, L.P., G. Leonard Baker Jr., Saunders Holdings, L.P., William H. Younger, Jr., Lauren L. Younger, Yovest L.P., Tench Coxe, Gregory P. Sands, James C. Gaither, James N. White, Jeffrey W. Bird, David E. Sweet, Sherryl W. Cassella, Lynne B. Graw, Diane J. Naar, Patricia Tom, Robert Yin, Andrew T. Sheehan, Yu-Ying Chiu Chen, Rooster Partners, LP, Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO David L. Anderson, Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO G. Leonard Baker, Jr., Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO William H. Younger, Jr., Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Tench Coxe, Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Andrew T. Sheehan, Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO David E. Sweet (Rollover), Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Sherryl W. Casella, Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Lynne B. Graw, Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Diane J. Naar, Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Yu-Ying Chen, Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Patricia Tom (Rollover), and Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Robert Yin.

“Subsidiaries” means, with respect to any person that is not an individual, any corporation, partnership, or other entity controlled by such person, including without limitation any variable interest entity (and each a “Subsidiary”).

“T. Rowe Price” means T. Rowe Price Associates, Inc., a registered investment adviser.

“T. Rowe Price Holder” means a Holder who holds its Preferred Shares in an investment account for which T. Rowe Price is the investment adviser.

“US” and “United States” means the United States of America.

“US GAAP” means generally accepted accounting principles in the United States.

“United States Dollars” and “US$” means the lawful currency of the US.

“written” and “in writing” include all modes of representing or reproducing words in visible form.

Words importing the singular number also include the plural number and vice versa.

Words importing the masculine gender also include the feminine gender.

Words importing persons only include corporations.

2. The business of the Company may be commenced as soon after incorporation as the Directors shall see fit, notwithstanding that only part of the shares may have been allotted.

5

3. The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred in or about the formation and establishment of the Company including the expenses of registration.

CLASSES, NUMBER AND PAR VALUE OF SHARES

4. The Company is authorized to issue two classes of stock to be designated, respectively, Preferred Shares and Ordinary Shares. The authorized share capital of the Company, being US$50,000, is divided into 5,000,000,000 shares of par value US$0.00001 each, comprising (i) 3,797,418,953 Ordinary Shares; (ii) 82,500,000 Series A Preferred Shares (the “Series A Preferred Shares”); (iii) 165,825,000 Series B-1 Preferred Shares (the “Series B-1 Preferred Shares”) and 112,875,000 Series B-2 Preferred Shares (the “Series B-2 Preferred Shares” together with Series B-1 Preferred Shares may hereinafter be referred to as Series B Preferred Shares); (iv) 317,398,462 Series C Preferred Shares (the “Series C Preferred Shares”); (v) 209,737,212 Series D Preferred Shares (the “Series D Preferred Shares”); (vi) 213,779,664 Series E Preferred Shares (the “Series E Preferred Shares”); and (vii) 100,465,709 Series F Preferred Shares (the “Series F Preferred Shares”).

4A. Immediately prior to the completion of a Qualified Public Offering, the authorized share capital of the Company, being US$50,000, will be divided into 5,000,000,000 shares of par value US$0.00001 each, comprising (i) 3,137,657,746 Class A Ordinary Shares; (ii) 659,761,207 Class B Ordinary Shares; (iii) 82,500,000 Series A Preferred Shares; (iv) 165,825,000 Series B-1 Preferred Shares and 112,875,000 Series B-2 Preferred Shares; (v) 317,398,462 Series C Preferred Shares; (vi) 209,737,212 Series D Preferred Shares; (vii) 213,779,664 Series E Preferred Shares; and (viii) 100,465,709 Series F Preferred Shares.

DESIGNATION, POWERS AND CONVERSION OF SHARES AFTER THE COMPLETION OF

A QUALIFIED PUBLIC OFFERING

4B. Immediately prior to the completion of a Qualified Public Offering, all Ordinary Shares held by 1Look Holdings Ltd. and its transferees which are its Affiliates shall be automatically re-designated as Class B Ordinary Shares, and all other Ordinary Shares that are issued and outstanding shall be automatically re-designated as Class A Ordinary Shares.

4C. After the completion of a Qualified Public Offering, (a) each holder of a Class A Ordinary Share issued and outstanding shall be entitled to one vote on all matters subject to the vote at general meetings of the Company, and (b) each holder of a Class B Ordinary Share issued and outstanding shall be entitled to three (3) votes on all matters subject to the vote at general meetings of the Company.

Notwithstanding any provision of these Articles to the contrary, the following matters shall be subject to the approval by the holders representing a majority of the aggregate voting power of the Company and also by the holders of a majority of the total issued and outstanding Class A Ordinary Shares:

(i) an amalgamation, arrangement or consolidation or scheme of arrangement (i) in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the jurisdiction in which the Company is incorporated or (ii) following which the holders of the voting securities of the Company do not continue to hold more than 50% of the combined voting power of the voting securities of the surviving entity;

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(ii) a sale, transfer or other disposition of all or substantially all of the assets of the Company;

(iii) issuance of that number of Ordinary Shares, or of securities convertible into or exercisable for that number of Ordinary Shares, equal to or in excess of twenty percent (20%) of the number of all Ordinary Shares issued and outstanding immediately prior to the issuance of such shares or securities on an as-converted basis, if (x) such Ordinary Shares are sold at a per share price less than the per share book or market value of the Company’s Ordinary Share or (y) such securities convertible into or exercisable for Ordinary Shares have a per share conversion or exercise price less than the per share book or market value of the Company’s Ordinary Share;

(iv) election of Director(s) to the Board at an annual general meeting; and

(v) issuance of Ordinary Shares, or of securities convertible into or exercisable for Ordinary Shares exceeding either 1% of the total outstanding Ordinary Shares on an as-converted basis or 1% of the aggregate voting power outstanding before the issuance to a Director, officer or substantial security holder of the Company on an individual basis.

4D. Ordinary Share Conversion

Upon and after the completion of a Qualified Public Offering, each Class B Ordinary Share shall be convertible into one (1) Class A Ordinary Share at any time upon the election of the Holder thereof. Class A Ordinary Shares shall not be convertible into Class B Ordinary Shares or Preferred Shares under any circumstances. A conversion of Class B Ordinary Shares to Class A Ordinary Shares shall be effected by way of compulsory repurchase by the Company of the relevant Class B Ordinary Shares for a redemption price equal to the original issue price for each Class B Ordinary Share and the issue of Class A Ordinary Shares for a subscription price equal to the redemption price for an equal number of Class B Ordinary Shares.

Subject to the Statute and notwithstanding any other provisions of these Articles, upon any transfer of Class B Ordinary Shares by a holder thereof to any person or entity which is not an Affiliate of such holder, such Class B Ordinary Shares shall be automatically and immediately converted into an equal number of Class A Ordinary Shares.

The Class A or Class B Ordinary Shares into which a holder is entitled in exercising his/her right to convert:

(A) shall be credited as fully paid;

(B) shall rank pari passu in all respects and form one class with the Class A Ordinary Shares or the Class B Ordinary Shares then in issue, as applicable; and

(C) shall entitle the holder to be paid an appropriate proportion of all dividends and other distributions declared, made or paid on Ordinary Shares in respect of the calendar year in which the relevant conversion date falls, but not in respect of an earlier financial year.

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RIGHTS AND PREFERENCES OF PREFERRED SHAREHOLDERS

5.1 Prevalence of Shareholders’ Agreement.

(a) The terms of the amended and restated shareholders’ agreement, by and among the Company, 1Look Holdings Ltd., Farallon, Chengwei Ventures, Sutter Hill, Leland Stanford, the Series C Holders, the Series D Holders, the Series E Holders and the Series F Holders dated 9 September 2010 (the “Shareholders’ Agreement”), the form of which is attached as Exhibit A hereto, shall constitute an integral part of the Company’s Memorandum of Association and these Articles and, in case of any discrepancy, contradiction or inconsistency between the main text of these Articles of Association and the Shareholders’ Agreement, the terms of the Shareholders’ Agreement shall prevail as between the Shareholders.

(b) Capitalized terms used but not otherwise defined herein shall have the meaning ascribed thereto in the Shareholders’ Agreement.

5.2 Rights of Preferred Shareholders.

5.2.1 Information Rights.

5.2.1.1 The Company shall deliver to each Holder:

(1) as soon as practicable, but in any event within ninety (90) days after the end of each fiscal year after a full-year operation of the Company, a consolidated income statement and statement of cash flows for the Company and its Subsidiaries for such fiscal year and a balance sheet for the Company and its Subsidiaries as of the end of the fiscal year, all prepared in accordance with US GAAP consistently applied and setting forth in each case in comparative form the figures for the previous fiscal year, and audited and certified by any one of Deloitte & Touche, Ernst & Young, KPMG or PricewaterhouseCoopers or by such other public accountant as acceptable to the Required Holders;

(2) as soon as practicable, but in any event within forty-five (45) days after the end of each fiscal quarter of the Company, unaudited consolidated financial statements of the Company and its Subsidiaries as of the end of such fiscal quarter and setting forth in each case in comparative form the figures for corresponding periods in the previous fiscal year;

(3) as soon as practicable, but in any event within fifteen (15) days of the end of each month, unaudited consolidated financial statements for the Company and its Subsidiaries as of the end of such month and setting forth in each case in comparative form the figures for corresponding periods in the previous fiscal year; and

(4) such other information customarily provided by similarly-situated companies to its major institutional investors with substantially similar compliance requirements as Brookside and Maverick.

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5.2.1.2 The Company shall submit to the Board for its approval and to each Series C Holder, Series D Holder, Series E Holder and Series F Holder, for informational purposes only, as soon as practicable, but in any event no less than fifteen (15) days prior to the commencement of each fiscal year, an annual operating budget for such fiscal year.

5.2.1.3 For the purpose of Article 5.2.1.1, the term “financial statements” shall be construed to include a balance sheet and related statements of earnings, stockholders equity and cash flows for the applicable period, prepared in accordance with US GAAP consistently applied with prior practice for earlier periods and compared against the Company’s annual operating plan and budget.

5.2.1.4 The Company will maintain true books and records of account in which full and correct entries will be made of all its business transactions pursuant to a system of accounting established and administered in accordance with US GAAP consistently applied (except as noted therein or as disclosed to the recipients thereof), and will set aside on its books all such proper accruals and reserves as shall be required under US GAAP consistently applied.

5.2.1.5 The Company shall permit each Holder, at such Holder’s expense, to visit and inspect any of the properties and examine the books of account and records of the Company and its Subsidiaries and Affiliates and discuss the affairs, finances and accounts of the Company and its Subsidiaries and Affiliates with the Directors, officers, employees, accountants, legal counsel and investment bankers of the Company, all at such reasonable times as may be requested by such Holder; provided, however, that the Company shall not be obliged to provide access to any information it considers to be a trade secret or confidential information, unless such Holder agrees to customary confidentiality provisions in respect of such trade secret or confidential information.

5.2.1.6 The covenants set forth in Articles 5.2.1.1 to 5.2.1.5 shall terminate (A) as to Holders and be of no further force or effect upon the earlier of (i) the closing of a Qualified Public Offering, (ii) the date when the Company first becomes subject to the periodic reporting requirements of Articles 12(g) or 15(d) of the Securities Exchange Act of 1934, as amended, of the United States (or comparable requirements under the laws of another jurisdiction); and (iii) such date as there shall no longer be any Preferred Shares outstanding; and (B) as to any Holder who owns less than five percent (5%) of the Company’s Ordinary Shares on an as-converted and fully-diluted basis. For the purposes of this Article 5.2.1.6, the percentage of the Company’s Ordinary Shares owned by (x) a Morgan Stanley Holder shall be determined in aggregate and not individually, by aggregating all Ordinary Shares (on an as-converted and fully-diluted basis) owned by all Morgan Stanley Holders and (y) a T. Rowe Price Holder shall be determined in aggregate and not individually, by aggregating all Ordinary Shares (on an as-converted and fully-diluted basis) owned by all T. Rowe Price Holders. For the purposes of this Article 5.2.1.6 only, Farallon shall be deemed a Holder.

5.2.1.7 The rights of any Holder under Articles 5.2.1.1 to 5.2.1.4 shall only be assigned (i) to another Holder; or (ii) to a permitted assignee or transferee who acquires any of the Preferred Shares held by the Holder.

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5.2.2 Conversion Rights.

5.2.2.1	(1)	Each Holder shall have the right (the “Conversion Right”), at any time and from time to time prior to the Automatic Conversion (as defined below), to convert any number of Preferred Shares held by such Holder by delivering to the Company at 5/F, SinoSteel Plaza, 8 Haidian Street, Beijing 100080, China or any transfer agent for the Preferred Shares a written notice (a “Conversion Notice”), together with the original certificate(s) evidencing the Preferred Shares to be converted and, if applicable, any event upon which such conversion is contingent. The Directors of the Company shall ensure that, forthwith upon receiving notice of the exercise of the Conversion Right, notice thereof is provided to all Holders of Preferred Shares whose names appear in the Register of Members, informing them that the Conversion Right has been exercised. The Preferred Shares to be converted shall be convertible into such number of fully paid and non-assessable Ordinary Shares (the “Optional Conversion Shares”) as is determined by multiplying (x) a number of Preferred Shares to be converted by (y) (A) the applicable Original Issue Price divided by (B) the applicable Conversion Price in effect at the time of conversion. Notwithstanding the foregoing, if any Preferred Shares held by Chengwei Ventures or any of their transferees which are their Affiliates are converted pursuant to this Article 5.2.2.1(1) prior to an Automatic Conversion, the Optional Conversion Shares into which such Preferred Shares are converted shall be automatically re-designated as Class B Ordinary Shares concurrently with the Automatic Conversion; if any Preferred Shares held by a Holder which is not Chengwei Ventures or an Affiliate of Chengwei Ventures are converted pursuant to this Article 5.2.2.1(1) prior to the Automatic Conversion, the Optional Conversion Shares into which such Preferred Shares are converted shall be automatically re-designated as Class A Ordinary Shares concurrently with the Automatic Conversion.
	(2)	Without an action being required by the Holder of the Shares and whether or not the certificates representing such Shares are surrendered to the Company or its transfer agent, each Preferred Share held by Chengwei Ventures or any of their transferees which are their Affiliates shall automatically be converted into fully-paid and non-assessable Class B Ordinary Shares and each Preferred Share held by a Holder which is not Chengwei Ventures or an Affiliate of Chengwei Ventures shall automatically be converted into fully-paid and non-assessable Class A Ordinary Shares (together with “Optional Conversion Shares”, referred to as “Conversion Shares”), based on the then effective Conversion Price, in the event of (i) a Qualified Public Offering; or (ii) the affirmative consent of Required Holders (“Automatic Conversion”); provided, however, that if the Automatic Conversion is in connection with a Qualified Public Offering, the conversion shall be conditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, and the conversion shall not be deemed to have occurred until immediately prior to the closing of such sale of securities and the person or persons entitled to receive the Class A Ordinary Shares or Class B Ordinary Shares, as the case may be, issuable upon such conversion shall be treated for all purposed as the record holders of such Class A Ordinary Shares or Class B Ordinary Shares, as the case may be, on such date.
	(3)	All Preferred Shares converted in accordance with these Articles by way of redemption shall be cancelled on the conversion date and all rights with respect to such Preferred Shares, including the rights, if any, to receive dividends, notices and to vote, shall immediately cease and terminate on the conversion date, except for the right of the Holders thereof to receive Conversion Shares, and if applicable, cash for any declared and unpaid dividends on the Preferred Shares being converted and cash for any fractional Conversion Shares and any other securities, property or cash required to be delivered upon conversion of Preferred Shares pursuant to this Article 5.2.2. Any Preferred Shares converted by way of redemption shall be canceled and the amount of the Company’s issued share capital shall be diminished by the par value of those Preferred Shares accordingly; but the conversion by way of redemption shall not be taken as reducing the amount of the Company’s authorized share capital.

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5.2.2.2 The Directors of the Company shall be obliged to carry out the conversion of all Preferred Shares in the manner and circumstances set forth in these Articles but may, with the approval of the affected Holders thereof, effect a conversion of Preferred Shares in any manner permitted by applicable law, including (i) redeeming or purchasing the relevant Preferred Shares and immediately applying the proceeds towards payment for such number of Conversion Shares calculated in accordance with Article 5.2.2 or (ii) varying the rights attaching to the Preferred Shares. For the purposes of any purchase or redemption, the Directors may, subject to the Company being able to pay its debts in the ordinary course of business immediately following the date upon which such payment is to be made, make payments out of its capital or share premium account. For the purpose of any conversion by variation of rights attaching to Preferred Shares pursuant to and in accordance with this Article 5.2.2 alone, each Shareholder of Preferred Shares shall be deemed to have given its consent to such variation without the need for any notice to be given by/to such Shareholder. Notwithstanding anything contained in these Articles to the contrary, in no event shall any exercise of the Conversion Right or an Automatic Conversion require the payment of any additional consideration by the converting Holders.

5.2.2.3 If more than one Preferred Share is to be converted at any one time by the same Holder, the aggregate number of Conversion Shares to be issued to the same person will be calculated on the basis of the aggregate number of Preferred Shares to be converted. Fractions of Conversion Shares will not be issued on conversion of Preferred Shares. Fractions of Conversion Shares are rounded down to the nearest whole number of Conversion Shares and, in lieu of fractional Conversion Shares, the Company shall pay in U.S. Dollars, the cash amount equal to such fraction multiplied by the fair market value of one Ordinary Share (as determined in good faith by the Board) on the date of conversion.

5.2.2.4 A certificate or certificates for the Conversion Shares may be issued to, and the Conversion Shares registered in the same name as, the Holder of the Preferred Shares being converted or (subject to the prior approval of the Directors) its nominee. If required by the Directors, certificates surrendered in connection with any conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, duly executed by the registered Holder. Upon conversion of only a portion of the number of Preferred Shares represented by a certificate surrendered for conversion, the Company shall issue and deliver to the holder of the certificate so surrendered for conversion, at the expense of the Company, a new certificate covering the number of Preferred Shares representing the unconverted portion of the certificate so surrendered.

5.2.2.5 Upon receipt of a Conversion Notice together with the original certificate or certificates evidencing the Preferred Shares by the Company, as soon as possible but in any event no later than seven (7) Business Days after such receipt, the Directors shall convene a meeting to approve the issue of Conversion Shares (in the case of a redemption or purchase), in each case applying the provisions of this Article 5.2.2 in order to determine the number of such Conversion Shares that are issuable. Certificates evidencing the Conversion Shares shall be dispatched by the Directors to the converting Holders and the Conversion Shares registered in the name of such converting Holder in the register of members forthwith upon the passing of the necessary resolutions of the Board. At the same time, the Company shall dispatch any other securities, property or cash required to be delivered on conversion and such assignments and other documents (if any) as may be required hereunder.

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5.2.2.6 The provisions of Article 5.2.2.4 and Article 5.2.2.5 above shall apply mutatis mutandis upon the occurrence of an Automatic Conversion, save that the Directors shall ensure that entries on the Register of Members recording the redemption or purchase of the Preferred Shares and issue of the Conversion Shares are made on the date that the Company’s Ordinary Shares are listed on the relevant exchange pursuant to a Qualified Public Offering.

5.2.2.7 At any time or from time to time after the Original Issue Date of the Series F Preferred Shares, the Holders of Preferred Shares shall have the following rights:

(1) If the Company shall sub-divide its outstanding Ordinary Shares into a larger number of Ordinary Shares or consolidate its outstanding Ordinary Shares into a smaller number of Ordinary Shares, then the Company shall also proportionately sub-divide or consolidate the Preferred Shares. In the case of any sub-division or consolidation, the Original Issue Price and the Conversion Price then in effect shall both be adjusted by multiplying each of the Original Issue Price and the Conversion Price then in effect by a fraction, the numerator of which shall be the number of Preferred Shares outstanding immediately prior to such event and the denominator of which shall be the number of Preferred Shares outstanding immediately after such sub-division or consolidation (as the case may be).

(2) Except as otherwise provided in these Articles, if the Company shall reclassify any of its Ordinary Shares into shares of another class or series, whether by capital reorganization, reclassification, or otherwise, then the rights attaching to the Preferred Shares shall themselves be automatically varied without the need for any vote of the Holders thereof or of any other Shareholder or Director, so that the Preferred Shares shall thereafter be convertible into such shares of the other class or series; after any such reclassification of the Ordinary Shares, the Conversion Right may still be exercised by serving a Conversion Notice to the Company.

(3) If the Company shall distribute to the holders of Ordinary Shares assets, evidences of its indebtedness, any Equity Security issued by any Person other than the Company or securities of the Company (other than Ordinary Shares), or options, rights or warrants to subscribe for or purchase any Equity Security issued by any Person or such securities (excluding those options, rights and warrants that give rise to the preemptive rights in Section 5 of the Shareholders’ Agreement and any rights granted, issued or offered to and accepted by existing employees of the Company in accordance with the ESOP) other than in any Liquidation Event, then the Company shall distribute to each Holder such assets, evidences of its indebtedness, any Equity Security issued by any Person or securities of the Company, or options, rights or warrants to subscribe for or purchase the said Equity Security or securities equal to an amount that such Holder would have received if all Preferred Shares held by such Holder had been converted into Ordinary Shares on or prior to the date of such event.

5.2.2.8 At any time or from time to time after the Original Issue Date of the Series F Preferred Shares, the Conversion Price with respect to the Preferred Shares shall be subject to additional adjustment as follows:

(1) No adjustment in the Conversion Price shall be made in respect of the issuance or deemed issuance of New Securities unless the Consideration Per Share of additional Ordinary Shares issued or deemed to be issued by the Company is less than the Conversion Price in effect with respect to the Preferred Shares on the date of and immediately prior to such issue.

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(2) In the event the Company at any time or from time to time after the Original Issue Date of the Series F Preferred shall issue any Options or Equity Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Equity Securities, then the maximum number of Ordinary Shares (as set forth in the instrument relating thereto and assuming the satisfaction of any conditions to exercisability but without regard to any provisions contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Equity Securities and Options therefor, the conversion or exchange of such Equity Securities, shall be deemed to be additional Ordinary Shares issued as of the time of such issue, or in the case such a record date shall have been fixed, as of the close of business on such record date; provided that additional Ordinary Shares shall not be deemed to have been issued unless the Consideration Per Share (determined pursuant to Article 5.2.2.8(4) hereof) of such additional Ordinary Shares would be less than the Conversion Price then in effect with respect to the Preferred Shares on the date of and immediately prior to such issue, or such record date, as the case may be; and provided, further, that in any such case in which additional Ordinary Shares are deemed to be issued:

(i) except as provided in clause (ii) below, no further adjustment in the Conversion Price with respect to the Preferred Shares shall be made upon the subsequent issue of Equity Securities or Ordinary Shares upon the exercise of such Options or conversion or exchange of such Equity Securities;

(ii) if such Options or Equity Securities by their terms provide, with the passage of time or otherwise or as the result of an amendment to such terms, for any change in the consideration payable to the Company, or change in the number of the Ordinary Shares issuable, upon the exercise, conversion or exchange thereof, including, but not limited to, a change resulting from the anti-dilution provisions thereof, the Conversion Price computed with respect to the Preferred Shares upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such change becoming effective, be recomputed to reflect such change insofar as it affects such Options or the rights of conversion or exchange under such Equity Securities;

(iii) upon the expiration of any such Options or any rights of conversion or exchange under such Equity Securities which shall not have been exercised, the Conversion Price computed with respect to the Preferred Shares upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon such expiration, be recomputed as if:

(a) in the case of Equity Securities or Options for the Ordinary Shares, the only additional Ordinary Shares issued were the Ordinary Shares, if any, actually issued upon the exercise of such Options or the conversion or exchange of such Equity Securities and the consideration received therefor was the consideration actually received by the Company for the issue of all such Options, whether or not exercised, plus the consideration actually received by the Company upon such exercise, or for the issue of all such Equity Securities which were actually converted or exchanged, plus the additional consideration, if any, actually received by the Company upon such conversion or exchange; and

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(b) in the case of Options for Equity Securities, only the Equity Securities, if any, actually issued upon the exercise thereof were issued at the time of issue of such Options, and the consideration received by the Company for the additional Ordinary Shares deemed to have been then issued was the consideration actually received by the Company for the issue of all such Options, whether or not exercised, plus the consideration deemed to have been received by the Company upon the issue of the Equity Securities with respect to which such Options were actually exercised;

(iv) if the terms of any Options or Equity Securities, the issuance of which did not result in the deemed issuance of any additional Ordinary Shares pursuant to the terms of these Articles (because the Consideration Per Share of the Ordinary Shares subject thereto was equal to or greater than the applicable Conversion Price then in effect), are revised after the Original Issue Date of the Series F Preferred Shares as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Equity Security to provide for any increase or decrease in the number of Ordinary Shares deliverable or in the consideration payable to the Company upon exercise of such Options or upon conversion of or in exchange for such Equity Securities, such Option or Equity Security, as so amended or adjusted, and the Ordinary Shares subject thereto shall be deemed to have been issued effective upon such increase or decrease becoming effective;

(v) no readjustment pursuant to clause (ii) or (iii) above shall have the effect of increasing the Conversion Price with respect to the Preferred Shares to an amount which exceeds the lower of (x) the Conversion Price of the Preferred Shares on the original adjustment date or (y) the Conversion Price of the Preferred Shares that would have resulted from any issuance of New Securities between the original adjustment date and such readjustment date; and

(vi) in the case of any Options which expire by their terms not more than thirty (30) days after the date of issue thereof, no adjustment of any Conversion Price shall be made until the expiration or exercise of all such Options, whereupon such adjustments shall be made in the same manner provided in clause (iii) above.

(3) If, at any time or from time to time after the Original Issue Date of the Series F Preferred Shares, the Company issues additional Ordinary Shares (including additional Ordinary Shares deemed to be issued pursuant to Article 5.2.2.8(2) hereof) for a Consideration Per Share (as determined in accordance with Article 5.2.2.8(4) below) less than the Conversion Price then in effect on the date immediately prior to such issue, then the Conversion Price shall be reduced, concurrently with such issue, to the Consideration Per Share received by the Company for such issue or deemed issue of the additional Ordinary Shares.

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(4) For purposes of this Article 5.2.2.8, the “Consideration Per Share” which shall be receivable by the Company for the issuance or deemed issuance of any additional Ordinary Shares shall be computed as follows:

(i) Cash and Property. Such Consideration Per Share shall:

(a) insofar as it consists of cash, be computed at the aggregate amount of cash actually received by the Company excluding amounts paid or payable for accrued interest and after deduction of any underwriting or similar commissions, compensation, concessions or other expenses paid or allowed by the Company in connection with such issue or sale (cash received other than in U.S. Dollars shall be converted into U.S. Dollars at the then effective middle rate of exchange between the relevant currency and U.S. Dollars);

(b) insofar as it consists of property other than cash, computed at the fair value thereof at the time of such issue, as determined in good faith by the Board; and

(c) in the event additional Ordinary Shares are issued together with other shares or securities or other assets of the Company for consideration which covers both, the proportion of such consideration so received, computed as provided in clauses (a) and (b) above, as determined in good faith by the Board.

(ii) Options and Equity Securities. The Consideration Per Share received by the Company for additional Ordinary Shares deemed to have been issued pursuant to Article 5.2.2.8(2), relating to Options and Equity Securities, shall be determined as follows:

(a) the total amount, if any, received or receivable by the Company as consideration for the issue of such Options or Equity Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion or exchange of such Equity Securities, or in the case of Options for Equity Securities, the exercise of such Options for Equity Securities and the conversion or exchange of such Equity Securities; divided by

(b) the maximum number of the Ordinary Shares (as set forth in the instruments relating thereto and assuming the satisfaction of any conditions to exercisability but without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Equity Securities or, in the case of Options for Equity Securities, the exercise of such options for Equity Securities and the conversion or exchange of such Equity Securities.

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5.2.2.9 Unless otherwise constituting a Liquidation Event, in the case of any consolidation or amalgamation with, or merger of or other business combination involving the Company which does not result in any reclassification, conversion, exchange or cancellation of the Ordinary Shares, or creation of a holding company owning all shares of the Company by way of exchange for all outstanding shares of the Company or transfer of all the outstanding shares of the Company to the holding company (each a “Conversion Event”) for the purposes of this Article 5.2.2.9, the Directors shall procure that the Person which consolidates or merges with the Company or controls the holding company, as the case may be, executes or adopts or causes to be executed or adopted a form of constitution, memorandum and articles of association, by-laws or other equivalent constitutional document(s) (any of the foregoing, for the purposes of this Article 5.2.2.9, a “Constitution”) providing that the Holder of each Preferred Share then outstanding will have the right thereafter to convert such Preferred Shares only into the kind and amount of shares and other securities, cash and property receivable upon the Conversion Event by a Holder of the number of Conversion Shares into which such Preferred Shares might have been converted immediately prior to the Conversion Event, assuming that such Holder failed to exercise its right of election, if any, as to the kind or amount of shares or other securities, cash or other property receivable upon the happening of the said Conversion Event (provided that if the kind or amount of shares or other securities, cash and other property receivable thereupon is not the same for each share of Ordinary Shares in respect of which such rights of election shall not have been exercised (a ‘‘non-electing share’’), then for the purpose of this Article 5.2.2.9 the kind and amount of shares or other securities, cash and other property receivable upon the happening of the Conversion Event by each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). The Directors shall procure that the Constitution executed or adopted as aforesaid will provide for adjustments that will be as nearly equivalent as may be practicable to the adjustments provided for in this Article 5.2.2. The above provisions of this Article 5.2.2.9 will apply in the same way to any subsequent consolidations, amalgamation, mergers, share exchange or share transfers.

5.2.2.10 Neither the Shareholders (by amendment of these Articles) nor the Directors (through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action) shall avoid or seek to avoid the observance or performance of any of the terms of these Articles, but will at all times in good faith assist in the carrying out of all the provisions of this Article 5.2.2 and each undertakes to take of all such further action as may be necessary or appropriate in order to protect the conversion rights of the Holders of the Preferred Shares against impairment to the extent required hereunder.

5.2.2.11 Certificate of Adjustment. In each case of an adjustment or readjustment of the Conversion Price for the number of shares of Ordinary Shares or other securities issuable upon conversion of the Preferred Shares, the Company, at its expense, shall compute such adjustment or readjustment in accordance with the provisions hereof and shall, upon request, prepare a certificate showing such adjustment or readjustment, and shall mail such certificate, postage prepaid, to each registered holder of Preferred Shares so requesting at the holder’s address as shown in the Company’s books. The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (i) the Consideration Per Share received or deemed to be received by the Company for any additional Ordinary Shares issued or deemed to have been issued, (ii) the Conversion Prices at the time in effect, (iii) the number of additional Ordinary Shares issued or deemed to be issued, and (iv) the type and amount, if any, of other property which at the time would be received upon conversion of the Preferred Shares. Failure to request or provide such notice shall have no effect on any such adjustment.

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5.2.2.12 Payment of Taxes. The Company will pay all taxes (other than taxes based upon income) and other governmental charges that may be imposed with respect to the issue or delivery of Conversion Shares upon conversion of Preferred Shares, excluding any tax or other charge imposed in connection with any transfer involved in the issue and delivery of Conversion Shares in a name other than that in which the Preferred Shares so converted were registered.

5.2.3 Dividend Rights.

5.2.3.1 Preferred Distribution. The Preferred Shareholders shall be entitled to receive dividends when and as declared by the Board, prior and in preference to the Ordinary Shares.

5.2.3.2 General Dividends. In addition to the preferred distribution referred to in Article 5.2.3.1 above, upon any payment of dividends on any Ordinary Shares, the Preferred Shareholders shall further be entitled to receive a dividend for each share of Preferred Shares that they hold in an amount equal to the product of (i) the distribution made to any Ordinary Share at such time and (ii) the number of Ordinary Shares into which such Preferred Share is convertible.

5.2.4 Liquidation Rights.

5.2.4.1 Liquidation Events. The following events shall be treated as “Liquidation Events” under this Article 5.2.4:

(1) any Sale Transaction; or

(2) any liquidation, dissolution or winding up of the Company;

and upon any such event, any proceeds (or consideration in the event of a Sale Transaction) resulting to the Shareholders of the Company therefrom shall be distributed in accordance with the terms of Article 5.2.4.2.

5.2.4.2 Liquidation Preferences. Upon any Liquidation Event, whether voluntary or involuntary, unless the Required Holders have agreed otherwise in advance and in writing, the Preferred Shareholders shall be entitled to the following:

(1) Before any distribution or payment shall be made to the Shareholders of any Ordinary Shares, an amount shall be paid with respect to each Preferred Share equal to the greater of (i) the Original Issue Price plus all dividends declared and unpaid with respect thereto (adjusted for any share dividends, combinations, splits, recapitalizations and the like); and (ii) the amount such Holder would be entitled to receive in such Liquidation Event if such Preferred Shares had been converted to Ordinary Shares immediately prior to such Liquidation Event before any payment or distribution is made to any Ordinary Shares. In case the distributable assets (or the consideration received in a Sale Transaction) are not enough for distribution or payment in full pursuant to this Article 5.2.4.2(1), the entire amount of the Company’s distributable assets (or consideration) shall be distributed to the Holders on a pro rata basis in accordance with the amounts to which each such Holder would be otherwise entitled to under this Article 5.2.4.2(1).

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(2) After all preferential amounts required to be paid to the holders of any class or series of shares of the Company ranking on liquidation prior to and in preference to the Ordinary Shares, upon any Liquidation Event, the remaining assets of the Company available for distribution to its Shareholders shall be distributed ratably among the holders of the Ordinary Shares. For avoidance of doubt, after distribution or payment of any liquidation preference distributable or payable on any Preferred Shares, the Preferred Shareholders shall not be entitled to receive, together with the Ordinary Shareholder, the portion of the assets of the Company remaining for distribution.

5.2.4.3 Valuation of Non-Cash Consideration. In any Sale Transaction, if the consideration to be received is securities of a Person or other property other than cash, its value will be deemed its fair market value as determined in good faith by the Board on the date such determination is made. The Company shall, upon receipt of such determination by the Board, give prompt written notice of the determination to each holder of Preferred Shares. Any securities shall be valued as follows:

(1) Securities not subject to investment letter or other similar restrictions on free marketability covered by clause (2) below:

(i) If traded on a national securities exchange or on a securities exchange outside of the US of similar international stature, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the thirty (30) trading-day period ending three (3) days prior to the closing of the Sale Transaction;

(ii) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty (30) trading-day period ending three (3) days prior to the closing of the Sale Transaction; and

(iii) If there is no active public market, the value shall be the fair market value thereof, as mutually determined by the Board and the holders of a majority of the Preferred Shares, voting together on an as-converted basis.

(2) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a shareholder’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined above in (1)(i), (ii) or (iii) to reflect the approximate fair market value thereof, as mutually determined by the Board and the holders of a majority of the Preferred Shares, voting together on an as-converted basis.

(3) The foregoing methods for valuing non-cash consideration to be distributed in connection with Sale Transaction shall be superseded by any determination of such value set forth in the definitive agreements governing such Sale Transaction for the purposes of this Article 5.2.4.

(4) In the event the requirements of this Article 5.2.4 are not complied with, the Company shall forthwith either:

(i) cause such closing of the Sale Transaction to be postponed until such time as the requirements of this Article 5.2.4 have been complied with; or

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(ii) cancel such transaction, in which event the rights, preferences and privileges of the holders of the Preferred Shares shall revert to and be the same as such rights, preferences and privileges existing immediately prior to such Sale Transaction.

(5) Allocation of Escrow. In the event of any Sale Transaction, if any portion of the consideration payable to the Shareholders of the Company is placed into escrow and/or is payable to the Shareholders of the Company subject to contingencies, the agreement or plan of merger or consolidation for such transaction shall provide that (i) the portion of such consideration that is not placed in escrow and not subject to any contingencies (the “Initial Consideration”) shall be allocated among the Shareholders in accordance with Article 5.2.4.2 as if the Initial Consideration were the only consideration payable in connection with such Liquidation Event, and (ii) any additional consideration which becomes payable to the Shareholders of the Company upon release from escrow or satisfaction of contingencies shall be allocated among the Shareholders of the Company in accordance with Article 5.2.4.2 after taking into account the previous payment of the Initial Consideration as part of the same transaction.

5.2.5 Voting Rights.

5.2.5.1 General Rights. Each Holder shall be entitled to such number of votes as equals the whole number of Ordinary Shares into which such Holder’s aggregate number of Preferred Shares are convertible immediately after the close of business on the record date of the determination of the Company’s Shareholders entitled to vote or, if no such record date is established, at the date such vote is taken or any written consent of the Company’s Shareholders is first solicited. Except as otherwise provided in these Articles, or as required by law, the Holders shall vote together with the holders of Ordinary Shares, and not as a separate class or series, on all matters put before the Shareholders.

5.2.5.2 Notwithstanding any provision of these Articles to the contrary, the Ordinary Shareholders and the Company shall each take all steps necessary to ensure that the Company shall not, and shall cause any Subsidiary not to, carry out any of the following actions (whether by amendment, merger, amalgamation, consolidation or otherwise or in any other manner) and no affirmative Board resolution shall be adopted to approve or carry out the same, except with the Requisite Approval. Requisite Approval shall be in addition to all other voting requirements contained herein. For the purposes of this Article, “Requisite Approval” shall mean the approval by the Holders representing at least seventy-five percent (75%) of the Preferred Shares on an as-converted basis. Requisite Approval can be obtained either by consent in writing or by the affirmative vote at a meeting. If consent is given in writing, such consent need only be consented to by Holders representing at least seventy-five percent (75%) of the Preferred Shares on an as-converted basis. If consent is given at a meeting, the quorum for such meeting shall be seventy-five percent (75%) of the Preferred Shares on an as-converted basis, and the required vote shall be, irrespective of attendance at such meeting, seventy-five percent (75%) of the Preferred Shares on an as-converted basis:

(i) any alterations or changes (whether by amendment, reclassification, merger, consolidation, reorganization or otherwise) of the rights, preferences or privileges of the Preferred Shares, or that otherwise adversely affect the Holders;

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(ii) creation or issuance of any new class or series of shares (by amendment to the Articles or by reclassification, merger, consolidation, reorganization or otherwise) having rights, preferences or privileges senior to or on a parity with the Preferred Shares;

(iii) creation or issuance of any new class or series of debt (by amendment to the Articles or by reclassification, merger, consolidation, reorganization or otherwise) having rights, preferences or privileges senior to or on a parity with the Preferred Shares;

(iv) (A) any merger with or into or consolidation or amalgamation with any other Person, whether or not the Company or a Subsidiary is the surviving entity, or (B) any disposal, transfer, sale or exclusive lease or license of any of its material properties or assets, or any Liquidation Event;

(v) authorization of the payment of any dividend or distribution to any holders of any class or series of Shares of the Company;

(vi) any amendment or waiver of any provision of the Company’s Amended and Restated Memorandum of Association or these Articles or other constitutional documents, including, without limitation, any amendment or waiver effected through a reorganization, consolidation, merger or other transaction;

(vii) reclassification or recapitalization of any outstanding shares or securities of the Company;

(viii) approval or incurrence of any debt (other than debt outstanding on the date hereof) or the approval of any issuance of equity (exclusive of the Series E Preferred Shares) in an amount equal to or in excess of US$3,000,000 in the aggregate for all such transactions;

(ix) any redemptions, repurchases or other acquisitions by the Company of Ordinary Shares or Preferred Shares;

(x) the creation of any new plan for the grant of Ordinary Shares or options to purchase Ordinary Shares to employees, Directors or consultants or the increase in Ordinary Shares available for issuance under the ESOP or any other stock option plan, restricted stock plan or other employee or consultant incentive plan;

(xi) any material transaction (whether by merger, consolidation, reorganization or otherwise) providing for the acquisition of any portion of the assets of any other person or an investment in or acquisition (whether by way of stock, loans, advances, guarantees or otherwise) of any other person;

(xii) any change in the authorized number of Directors on the Board from seven (7);

(xiii) the creation of any Subsidiaries other than wholly-owned Subsidiaries;

(xiv) any increase or decrease (whether by amendment, reclassification, merger, consolidation, reorganization or otherwise) in the number of authorized shares of Preferred Shares, any series of Preferred Shares, or Ordinary Shares;

(xv) any amendment or revision of any Equity Control and Service Agreement;

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(xvi) any waiver of any right under any Equity Control and Service Agreement;

(xvii) any transfer, lease or license of material patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information or other proprietary rights or processes necessary for conducting the business of the Company and its Subsidiaries as currently conducted or as presently proposed to be conducted; provided, however, the preceding protective provision shall not apply to (a) any such transfers, leases or licenses approved by the Board (including a majority of the Directors elected by the Holders) or (b) licenses entered into by the Company in the ordinary course of the Company’s business consistent with past practices; or

(xviii) any agreement to undertake any of the foregoing actions.

(xix) The covenants set forth in this Article 5.2.5.2 shall terminate upon the closing of a Qualified Public Offering.

5.2.5.3 Notwithstanding any provision of the Articles to the contrary, the Ordinary Shareholders and the Company shall each take all steps necessary to ensure that the Company shall not, and shall cause any Subsidiary not to, carry out any of the following actions, and no affirmative Board resolution shall be adopted to approve or carry out the same, without the affirmative vote or consent of at least a majority of the:

(i) Series D Holders in connection with (a) any alterations to the rights, preferences, and privileges of the Series D Preferred Shares, or (b) any increase or decrease in the number of authorized shares of the Series D Preferred Shares;

(ii) Series E Holders in connection with (a) any alterations to the rights, preferences, and privileges of the Series E Preferred Shares, or (b) any increase or decrease in the number of authorized shares of the Series E Preferred Shares; and

(iii) Series F Holders in connection with (a) any alterations to the rights, preferences, and privileges of the Series F Preferred Shares, or (b) any increase or decrease in the number of authorized shares of the Series F Preferred Shares.

The covenants set forth in this Article 5.2.5.3 shall terminate upon the closing of a Qualified Public Offering.

5.2.5.4 Right to Call Meetings. In addition to any rights which may be available under the Memorandum of Association or these Articles or otherwise under law, the holders of not less than ten percent (10%) in voting power of the outstanding Preferred Shares shall be entitled to call meetings of the Shareholders of the Company for the purpose of electing or removing Directors. Within five (5) Business Days after written application by the holders of not less than ten percent (10%) in voting power of the outstanding Preferred Shares, the Chief Executive Officer or Secretary, or such other officer of the Company as may be authorized to give notice of meetings of Shareholders of the Company, shall notify each Shareholder of the Company entitled to such notice of the date, time, place and purpose of such meeting. No meeting of Shareholders called pursuant to this Article 5.2.5.3 shall take place more than ten (10) days after the date notice of such meeting is given.

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5.2.6 Notice. Without prejudice to any other provision contained in these Articles, upon (i) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or (ii) any Sale Transaction or other capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company, any merger or consolidation of the Company with or into any other corporation, or any voluntary or involuntary dissolution, liquidation or winding up of the Company, the Company shall mail to each holder of Preferred Shares at least ten (10) days prior to (x) the record date, if any, specified therein; or (y) if no record date is specified, the date upon which such action is to take effect (or, in either case, such longer period as may be required by the Statute; provided, however, that any such period may be shortened to any period approved by the holders of a majority of the outstanding Preferred Shares (as determined on an as-converted basis) to the extent not inconsistent with the Statute) a notice specifying (A) the date on which any such record is to be taken for the purpose of such dividend or distribution and a description of such dividend or distribution, (B) the date on which any such Sale Transaction, reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up is expected to become effective and a description of the material terms and conditions of the impending transaction (and the Company shall thereafter give such holders prompt notice of any material changes), and (C) the date, if any, that is to be fixed as to when the holders of record of Ordinary Shares (or other securities) shall be entitled to exchange their Ordinary Shares (or other securities) for securities or other property deliverable upon such Sale Transaction, reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up and the amount per share and character of such exchange applicable to the Preferred Shares and the Ordinary Shares.

5.2.7 Aggregation of Shares. All Preferred Shares held or acquired by affiliated entities or persons, including Preferred Shares held by individuals or entities having the same registered investment adviser, shall be aggregated together for the purpose of determining the availability of any rights under these Articles.

CERTIFICATES FOR SHARES

6. Certificates representing shares of the Company shall be in such form as shall be determined by the Directors. Such certificates may be under Seal. All certificates for shares shall be consecutively numbered or otherwise identified and shall specify the shares to which they relate. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered in the Register of Members of the Company. All certificates surrendered to the Company for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled. The Directors may authorize certificates to be issued with the seal and authorized signature(s) affixed by some method or system of mechanical process.

7. Notwithstanding Article 6 hereof, if a share certificate be defaced, lost or destroyed, it may be renewed on payment of a fee of one dollar (US$1.00) or such less sum and on such terms (if any) as to evidence and indemnity and the payment of the expenses incurred by the Company in investigating evidence, as the Directors may prescribe (but without the obligation to post a bond).

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ISSUE OF SHARES

8. Subject to the provisions in the Amended and Restated Memorandum of Association and these Articles, and without prejudice to any special rights previously conferred on the holders of existing shares, the Directors may allot, issue, grant options over or otherwise dispose of shares of the Company (including fractions of a share) with or without preferred, deferred or other special rights or restrictions, whether in regard to dividend, voting, return of capital or otherwise and to such persons, at such times and on such other terms as they think proper PROVIDED ALWAYS that, notwithstanding any provision to the contrary contained in these Articles of Association, the Company shall be precluded from issuing bearer shares, warrants, coupons or certificates.

9. The Company shall maintain a register of its Members (i.e., Shareholders) (the “Register of Members”) and every person whose name is entered as a Shareholder in the Register of Members shall be entitled without payment to receive within two (2) months after allotment or lodgement of transfer (or within such other period as the conditions of issue shall provide) one (1) certificate for all his shares or several certificates each for one or more of his shares upon payment of fifty cents (US$0.50) for every certificate after the first or such less sum as the Directors shall from time to time determine provided that in respect of a share or shares held jointly by several persons the Company shall not be bound to issue more than one certificate and delivery of a certificate for a share to one of the several joint holders shall be sufficient delivery to all such holders.

TRANSFER OF SHARES

10. The instrument of transfer of any share shall be in writing and shall be executed by or on behalf of the transferor and the transferor shall be deemed to remain the holder of a share until the name of the transferee is entered in the register in respect thereof.

11. The registration of transfers may be suspended at such time and for such periods as the Directors may from time to time determine, provided always that such registration shall not be suspended for more than forty-five (45) days in any year.

REDEEMABLE SHARES

12.	(a)	Subject to the provisions of the Statute and the Amended and Restated Memorandum of Association and these Articles, shares may be issued on the terms that they are, or at the option of the Company or the holder are, to be redeemed on such terms and in such manner as the Company, before the issue of the shares, may by Special Resolution determine.
	(b)	Subject to the provisions of the Statute and the Amended and Restated Memorandum of Association and these Articles, the Company may purchase its own shares (including fractions of a share), including any redeemable shares, provided that the manner of purchase has first been authorized by the Company in general meeting and may make payment therefor in any manner authorized by the Statute, including out of capital.

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VARIATION OF RIGHTS OF SHARES

13. Subject to the provisions of the Amended and Restated Memorandum of Association and these Articles, if at any time the share capital of the Company is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the Company is being wound up, be varied with the consent in writing of the holders of seventy-five percent (75%) of the issued shares of that class, or with the sanction of a Special Resolution passed at a general meeting of the holders of the shares of that class.

The provisions of these Articles relating to general meetings shall apply to every such general meeting of the holders of one class of shares except that the necessary quorum shall be one person holding or representing by proxy at least one-third of the issued shares of the class and that any holder of shares of the class present in person or by proxy may demand a poll.

14. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

COMMISSION ON SALE OF SHARES

15. The Company may in so far as the Statute from time to time permits pay a commission to any person in consideration of his subscribing or agreeing to subscribe whether absolutely or conditionally for any shares of the Company. Such commissions may be satisfied by the payment of cash or the lodgement of fully or partly paid-up shares or partly in one way and partly in the other. The Company may also on any issue of shares pay such brokerage as may be lawful.

NON-RECOGNITION OF TRUSTS

16. No person shall be recognized by the Company as holding any share upon any trust and the Company shall not be bound by or be compelled in any way to recognized (even when having notice thereof) any equitable, contingent, future, or partial interest in any share, or any interest in any fractional part of a share, or (except only as is otherwise provided by these Articles or the Statute) any other rights in respect of any share except an absolute right to the entirety thereof in the registered holder.

CALL ON SHARES

17. (a) The Directors may from time to time make calls upon the Members in respect of any monies unpaid on their shares (whether on account of the nominal value of the shares or by way of premium or otherwise) and not by the conditions of allotment thereof made payable at fixed terms, provided that no call shall be payable at less than one month from the date fixed for the payment of the last preceding call, and each Member shall (subject to receiving at least fourteen (14) days’ notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on the shares. A call may be revoked or postponed as the Directors may determine. A call may be made payable by installments.

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(b) A call shall be deemed to have been made at the time when the resolution of the Directors authorising such call was passed.

(c) The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.

18. If a sum called in respect of a share is not paid before or on a day appointed for payment thereof, the persons from whom the sum is due shall pay interest on the sum from the day appointed for payment thereof to the time of actual payment at such rate not exceeding ten per cent per annum as the Directors may determine, but the Directors shall be at liberty to waive payment of such interest either wholly or in part.

19. Any sum which by the terms of issue of a share becomes payable on allotment or at any fixed date, whether on account of the nominal value of the share or by way of premium or otherwise, shall for the purposes of these Articles be deemed to be a call duly made, notified and payable on the date on which by the terms of issue the same becomes payable, and in the case of non-payment all the relevant provisions of these Articles as to payment of interest forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.

20. The Directors may, on the issue of shares, differentiate between the holders as to the amount of calls or interest to be paid and the times of payment.

21.	(a)	The Directors may, if they think fit, receive from any Member willing to advance the same, all or any part of the monies uncalled and unpaid upon any shares held by him, and upon all or any of the monies so advanced may (until the same would but for such advances, become payable) pay interest at such rate not exceeding (unless the Company in general meeting shall otherwise direct) seven per cent per annum, as may be agreed upon between the Directors and the Member paying such sum in advance.
	(b)	No such sum paid in advance of calls shall entitle the Member paying such sum to any portion of a dividend declared in respect of any period prior to the date upon which such sum would, but for such payment, become presently payable.

FORFEITURE OF SHARES

22. (a) If a Member fails to pay any call or installment of a call or to make any payment required by the terms of issue on the day appointed for payment thereof, the Directors may, at any time thereafter during such time as any part of the call, installment or payment remains unpaid, give notice requiring payment of so much of the call, installment or payment as is unpaid, together with any interest which may have accrued and all expenses that have been incurred by the Company by reason of such non-payment. Such notice shall name a day (not earlier than the expiration of fourteen (14) days from the date of giving of the notice) on or before which the payment required by the notice is to be made, and shall state that, in the event of non-payment at or before the time appointed the shares in respect of which such notice was given will be liable to be forfeited.

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(b) If the requirements of any such notice as aforesaid are not complied with, any share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the Directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited share and not actually paid before the forfeiture.

(c) A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the Directors think fit.

23. A person whose shares have been forfeited shall cease to be a Member in respect of the forfeited shares, but shall, notwithstanding, remain liable to pay to the Company all monies which, at the date of forfeiture were payable by him to the Company in respect of the shares together with interest thereon, but his liability shall cease if and when the Company shall have received payment in full of all monies whenever payable in respect of the shares.

24. A certificate in writing under the hand of one Director or the Secretary of the Company that a share in the Company has been duly forfeited on a date stated in the declaration shall be conclusive evidence of the fact therein stated as against all persons claiming to be entitled to the share. The Company may receive the consideration given for the share on any sale or disposition thereof and may execute a transfer of the share in favour of the person to whom the share is sold or disposed of and he shall thereupon be registered as the holder of the share and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the share.

25. The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the nominal value of the share or by way of premium as if the same had been payable by virtue of a call duly made and notified.

REGISTRATION OF EMPOWERING INSTRUMENTS

26. The Company shall be entitled to charge a fee not exceeding one dollar (US$1.00) on the registration of every probate, letters of administration, certificate of death or marriage, power of attorney, notice in lieu of distringas, or other instrument.

TRANSMISSION OF SHARES

27. In case of the death of a Shareholder, the survivor or survivors where the deceased was a joint holder, and the legal personal representatives of the deceased where he was a sole holder, shall be the only persons recognised by the Company as having any title to his interest in the shares, but nothing herein contained shall release the estate of any such deceased holder from any liability in respect of any shares which had been held by him solely or jointly with other persons.

28. (a) Any person becoming entitled to a share in consequence of the death or bankruptcy or liquidation or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may from time to time be required by the Directors and subject as hereinafter provided, elect either to be registered himself as holder of the share or to make such transfer of the share to such other person nominated by him as the deceased or bankrupt person could have made and to have such person registered as the transferee thereof, but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the share by that Member before his death or bankruptcy as the case may be.

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(b) If the person so becoming entitled shall elect to be registered himself as holder he shall deliver or send to the Company a notice in writing signed by him stating that he so elects.

29. A person becoming entitled to a share by reason of the death or bankruptcy or liquidation or dissolution of the holder (or in any other case than by transfer) shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, before being registered as a Member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company PROVIDED HOWEVER that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the share and if the notice is not complied with within ninety (90) days the Directors may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the share until the requirements of the notice have been complied with.

AMENDMENT OF MEMORANDUM OF ASSOCIATION, AMENDMENT OF ARTICLES OF

ASSOCIATION, CHANGE OF LOCATION OF REGISTERED OFFICE, APPROVAL OF

LIQUIDATION & ALTERATION OF CAPITAL

30. (a) Subject to and in so far as permitted by the provisions of the Statute and subject to Article 5.2.5 of these Articles, the Company may from time to time by ordinary resolution alter or amend its Memorandum of Association:

(i) to consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;

(ii) by subdivision of its existing shares or any of them to divide the whole or any part of its share capital into shares of smaller amount than is fixed by the Memorandum of Association or into shares without nominal or par value; or

(iii) to cancel any shares which at the date of the passing of the resolution have not been taken or agreed to be taken by any person.

(b) All new shares created hereunder shall be subject to the same provisions with reference to the payment of calls, transfer, transmission, forfeiture and otherwise as the shares in the original share capital.

(c) Subject to the provisions of the Statute and the provisions of Article 5.2.5 of these Articles, the Company may at any time and from time to time by Special Resolution (i) change its name or alter its objects, (ii) alter or amend the Memorandum of Association or these Articles in whole or in part, (iii) increase the authorized number of Preferred Shares, or (iv) approve any liquidation, dissolution or winding up of the Company. The covenants set forth in this Article 30(c) shall terminate upon the closing of a Qualified Public Offering.

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(d) Without prejudice to Article 13 hereof and subject to the provisions of the Statute and subject to Article 5.2.5 of these Articles, the Company may by Special Resolution reduce its share capital and any capital redemption reserve fund.

(e) Subject to the provisions of the Statute, the Company may by resolution of the Directors change the location of its registered office.

CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE

31. For the purpose of determining Members entitled to notice of or to vote at any meeting of Members or any adjournment thereof, or Members entitled to receive payment of any dividend, or in order to make a determination of Members for any other proper purpose, the Directors of the Company may provide that the register of Members shall be closed for transfers for a stated period but not to exceed in any case forty (40) days. If the register of Members shall be so closed for the purpose of determining Members entitled to notice of or to vote at a meeting of Members such register shall be so closed for at least ten (10) days immediately preceding such meeting and the record date for such determination shall be the date of the closure of the register of Members.

32. In lieu of or apart from closing the register of Members, the Directors may fix in advance a date as the record date for any such determination of Members entitled to notice of or to vote at a meeting of the Members and for the purpose of determining the Members entitled to receive payment of any dividend the Directors may, at or within ninety (90) days prior to the date of declaration of such dividend fix a subsequent date as the record date for such determination.

33. If the register of Members is not so closed and no record date is fixed for the determination of Members entitled to notice of or to vote at a meeting of Members or Members entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of Members. When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination shall apply to any adjournment thereof.

GENERAL MEETING

34. (a) Subject to clause (c) hereof, the Company shall within one (1) year of its incorporation and in each year of its existence thereafter hold a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it. The annual general meeting shall be held at such time and place as the Directors shall appoint and if no other time and place is prescribed by them, it shall be held at the registered office on the second Wednesday in December of each year at ten o’clock in the morning.

(b) At these meetings the report of the Directors (if any) shall be presented.

(c) If the Company is exempted as defined in the Statute it may but shall not be obliged to hold an annual general meeting.

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35. (a) The Directors may whenever they think fit, and they shall on the requisition of Members of the Company holding at the date of the deposit of the requisition not less than one-tenth of such of the paid-up capital of the Company as at the date of the deposit carries the right of voting at general meetings of the Company, proceed to convene a general meeting of the Company.

(b) The requisition must state the objects of the meeting and must be signed by the requisitionists and deposited at the registered office of the Company and may consist of several documents in like form each signed by one or more requisitionists.

(c) If the Directors do not within twenty-one (21) days from the date of the deposit of the requisition duly proceed to convene a general meeting, the requisitionists, or any of them representing more than one-half of the total voting rights of all of them, may themselves convene a general meeting, but any meeting so convened shall not be held after the expiration of three months after the expiration of the said twenty-one (21) days.

(d) A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as possible as that in which general meetings are to be convened by Directors.

NOTICE OF GENERAL MEETINGS

36. At least seven (7) days’ notice shall be given of an annual general meeting or any other general meeting. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day for which it is given and shall specify the place, the day and the hour of the meeting and the general nature of the business and shall be given in manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company PROVIDED that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the provisions of Article 35 have been complied with, be deemed to have been duly convened if it is so agreed:

(a) in the case of a general meeting called as an annual general meeting, by all the Members entitled to attend and vote thereat or their proxies; and

(b) in the case of any other general meeting, by the presence of the Preferred Shareholders holding no less than seventy percent (70%) of all Preferred Shares on an as-converted basis and by a majority in number of the Ordinary Shareholders having a right to attend and vote at the meeting, being a majority together holding not less than eighty percent (80%) in nominal value or in the case of shares without nominal or par value eighty percent (80%) of the shares in issue, or their proxies.

37. The accidental omission to give notice of a general meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive notice shall not invalidate the proceedings of that meeting.

PROCEEDINGS AT GENERAL MEETINGS

38. No business shall be transacted at any general meeting unless a quorum of Members is present at the time when the meeting proceeds to business; two (2) Members present in person or by proxy shall be a quorum provided always that if the Company has one Member of record the quorum shall be that one Member present in person or by proxy.

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39. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of Members, shall be dissolved and in any other case it shall stand adjourned to the same day in the next week at the same time and place or to such other time or such other place as the Directors may determine and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting the Members present shall be a quorum.

40. The Chairman, if any, of the Board shall preside as Chairman at every general meeting of the Company, or if there is no such Chairman, or if he shall not be present within fifteen (15) minutes after the time appointed for the holding of the meeting, or is unwilling to act, the Directors present shall elect one of their number to be Chairman of the meeting.

41. If at any general meeting no Director is willing to act as Chairman or if no Director is present within fifteen (15) minutes after the time appointed for holding the meeting, the Members present shall choose one of their number to be Chairman of the meeting.

42. The Chairman may, with the consent of any general meeting duly constituted hereunder, and shall if so directed by the meeting, adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a general meeting is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting; save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned general meeting.

43. At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is, before or on the declaration of the result of the show of hands, demanded by the Chairman or any other Member present in person or by proxy.

44. Unless a poll be so demanded a declaration by the Chairman that a resolution has on a show of hands been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the Company’s Minute Book containing the Minutes of the proceedings of the meeting shall be conclusive evidence of that fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.

45. The demand for a poll may be withdrawn.

46. Except as provided in Article 54, if a poll is duly demanded it shall be taken in such manner as the Chairman directs and the result of the poll shall be deemed to be the resolution of the general meeting at which the poll was demanded.

47. In the case of an equality of votes, whether on a show of hands or on a poll, the Chairman of the general meeting at which the show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote.

48. A poll demanded on the election of a Chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the Chairman of the general meeting directs and any business other than that upon which a poll has been demanded or is contingent thereon may be proceeded with pending the taking of the poll.

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49. Subject to Article 5.2.5.2 or unless otherwise provided by contract, a resolution in writing (in one or more counterparts) shall be as valid and effective as if the resolution had been passed at a duly convened and held general meeting of the Company if:

(a) in the case of a Special Resolution, it is signed by all Members for the time being entitled to receive notice of, and to attend and vote at, general meetings (or, being companies signed by their duly authorized representatives); or

(b) in the case of any resolution passed other than as a Special Resolution, it is signed by Members for the time being holding Shares carrying in aggregate not less than the minimum number of votes that would be necessary to authorize or take such action at a general meeting at which all Shares entitled to vote thereon were present and voted (calculated in accordance with Article 51) (or, being companies, signed by their duly authorized representative).

VOTES OF MEMBERS

50. Subject to any rights or restrictions for the time being attached to any class or classes of shares, on a show of hands every Member of record present in person or by proxy at a general meeting shall have one vote and on a poll every Member of record present in person or by proxy shall have one vote for each share registered in his name in the register of Members.

51. In the case of joint holders of record the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members.

52. A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his committee, receiver, curator bonis, or other person in the nature of a committee, receiver or curator bonis appointed by that court, and any such committee, receiver, curator bonis or other persons may vote by proxy.

53. No Member shall be entitled to vote at any general meeting unless he is registered as a Shareholder of the Company on the record date for such meeting nor unless all calls or other sums presently payable by him in respect of shares in the Company have been paid.

54. No objection shall be raised to the qualification of any voter except at the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at such general meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the Chairman of the general meeting whose decision shall be final and conclusive.

55. On a poll or on a show of hands votes may be given either personally or by proxy.

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PROXIES

56. The instrument appointing a proxy shall be in writing and shall be executed under the hand of the appointor or of his attorney duly authorized in writing, or, if the appointor is a corporation under the hand of an officer or attorney duly authorized in that behalf. A proxy need not be a Member of the Company.

57. The instrument appointing a proxy shall be deposited at the registered office of the Company or at such other place as is specified for that purpose in the notice convening the meeting no later than the time for holding the meeting, or adjourned meeting provided that the Chairman of the meeting may at his discretion direct that an instrument of proxy shall be deemed to have been duly deposited upon receipt of telecopy confirmation from the appointor that the instrument of proxy duly signed is in the course of transmission to the Company.

58. The instrument appointing a proxy may be in any usual or common form and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked. An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll.

59. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the share in respect of which the proxy is given provided that no intimation in writing of such death, insanity, revocation or transfer as aforesaid shall have been received by the Company at the registered office before the commencement of the general meeting, or adjourned meeting at which it is sought to use the proxy.

60. Any corporation which is a Member of record of the Company may in accordance with its Articles or in the absence of such provision by resolution of its Directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of Members of the Company, and the person so authorized shall be entitled to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise if it were an individual Member of record of the Company.

61. Shares of its own capital belonging to the Company or held by it in a fiduciary capacity shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding shares at any given time.

DIRECTORS

62. (a) Brookside shall have the right to appoint one (1) individual to serve on the Board. No member of the Board appointed pursuant to this Article may be removed unless Brookside elects to remove such Director. Any vacancy on the Board created by the resignation, removal, incapacity or death of any Director appointed pursuant to this Article shall only be filled by another individual appointed by Brookside.

(b) Chengwei Ventures shall have the right to appoint one (1) individual to serve on the Board. No member of the Board appointed pursuant to this Article may be removed unless Chengwei Ventures elects to remove such Director. Any vacancy on the Board created by the resignation, removal, incapacity or death of any Director appointed pursuant to this Article shall only be filled by another individual appointed by Chengwei Ventures.

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(c) Sutter Hill shall have the right to appoint one (1) individual to serve on the Board. No member of the Board appointed pursuant to this Article may be removed unless Sutter Hill elects to remove such Director. Any vacancy on the Board created by the resignation, removal, incapacity or death of any Director appointed pursuant to this Article shall only be filled by another individual appointed by Sutter Hill.

(d) Maverick shall have the right to appoint one (1) individual to serve on the Board. No member of the Board appointed pursuant to this Article may be removed unless Maverick elects to remove such Director. Any vacancy on the Board created by the resignation, removal, incapacity or death of any Director appointed pursuant to this Article shall only be filled by another individual appointed by Maverick.

(e) The holders of at least a majority of the votes attributable to the then outstanding Ordinary Shares shall have the right to the exclusion of all other classes or series of the Company’s capital stock, to appoint the Chief Executive Officer of the Company to serve on the Board. No member of the Board appointed pursuant to this Article may be removed unless the holders of at least a majority of the votes attributable to the then outstanding Ordinary Shares elect to remove such Director or such Director ceases to act as Chief Executive Officer of the Company (whether voluntarily or involuntarily). Any vacancy on the Board created by the resignation, removal, incapacity or death of any Director appointed pursuant to this Article shall only be filled pursuant to this Article 62(e).

(f) One individual nominated by the Chief Executive Officer of the Company and approved by each of the Directors nominated pursuant to Article 62(a) through (e) hereof shall serve on the Board. Such director shall be independent within the meaning of the rules and regulations of the relevant stock exchange upon the closing of a Qualified Public Offering.

(g) One individual nominated by the Chief Executive Officer of the Company and approved by each of the Directors nominated pursuant to Article 62(a) through (e) hereof shall serve on the Board. Such director shall be both independent and a financial expert within the meaning of the relevant rules and regulations of the relevant stock exchange upon the closing of a Qualified Public Offering.

(h) One individual nominated by Farallon and approved by each of the Directors nominated pursuant to Article 62(a) through (e) hereof shall be entitled to attend all meetings of the Directors. Such individual shall not be entitled to vote at any such meeting and shall not be counted in respect of a necessary quorum or otherwise.

(i) One individual nominated by Morgan Stanley and approved by each of the Directors nominated pursuant to Article 62(a) through (e) hereof shall be entitled to attend all meetings of the Directors. Such individual shall not be entitled to vote at any such meeting and shall not be counted in respect of a necessary quorum or otherwise.

(j) Each of Farallon, Morgan Stanley and T. Rowe Price shall be entitled to receive contemporaneously a copy of all communications sent to the Board.

(k) The rights provided under this Article 62 shall be amended as required in order to comply with the rules and regulations of the relevant stock exchange upon the closing of a Qualified Public Offering.

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63. The remuneration to be paid to the Directors shall be such remuneration as the Directors shall determine. Such remuneration shall be deemed to accrue from day to day. The Directors shall also be entitled to be paid their traveling, hotel and other reasonable expenses properly incurred by them in going to, attending and returning from meetings of the Directors, or any committee of the Directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive a reasonable fixed allowance in respect thereof as may be determined by the Directors from time to time, or a combination partly of one such method and partly the other.

64. The Directors may by resolution award special remuneration to any Director of the Company undertaking any special work or services for, or undertaking any special mission on behalf of, the Company other than his ordinary routine work as a Director. Any fees paid to a Director who is also counsel or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his remuneration as a Director.

65. A Director or alternate Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the Directors may determine.

66. A Director or alternate Director may act by himself or his firm in a professional capacity for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director or alternate Director.

67. No shareholding qualification for Directors shall be required.

68. A Director or alternate Director of the Company may be or become a director or other officer of or otherwise interested in any company promoted by the Company or in which the Company may be interested as shareholder or otherwise and no such Director or alternate Director shall be accountable to the Company for any remuneration or other benefits received by him as a director or officer of, or from his interest in, such other company.

69. No person shall be disqualified from the office of Director or alternate Director or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by or on behalf of the Company in which any Director or alternate Director shall be in any way interested be or be liable to be avoided, nor shall any Director or alternate Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or transaction by reason of such Director holding office or of the fiduciary relation thereby established. A Director (or his alternate Director in his absence) shall be at liberty to vote in respect of any contract or transaction in which he is so interested as aforesaid PROVIDED HOWEVER that the nature of the interest of any Director or alternate Director in any such contract or transaction shall be disclosed by him or the alternate Director appointed by him at or prior to its consideration and any vote thereon.

70. A general notice that a Director or alternate Director is a shareholder of any specified firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure under Article 69 and after such general notice it shall not be necessary to give special notice relating to any particular transaction.

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71. To the maximum extent permitted from time to time under the Statute, the Company renounces any interest or expectancy of the Company in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to its officers, Directors or shareholders, other than those officers, Directors or shareholders who are employees of the Company. No amendment or repeal of this Article 71 shall apply to or have any effect on the liability or alleged liability of any officer, Director or shareholder of the Company for or with respect to any opportunities of which such officer, Director, or stockholder becomes aware prior to such amendment or repeal.

ALTERNATE DIRECTORS

72. Subject to the exception contained in Article 67, a Director who expects to be unable to attend Directors’ meetings because of absence, illness or otherwise may appoint any person to be an alternate Director to act in his stead and such appointee whilst he holds office as an alternate Director shall, in the event of absence therefrom of his appointor, be entitled to attend meetings of the Directors and to vote thereat and to do, in the place and stead of his appointor, any other act or thing which his appointor is permitted or required to do by virtue of his being a Director as if the alternate Director were the appointor, other than appointment of an alternate to himself, and he shall ipso facto vacate office if and when his appointor ceases to be a Director or removes the appointee from office. Any appointment or removal under this Article shall be effected by notice in writing under the hand of the Director making the same.

POWERS AND DUTIES OF DIRECTORS

73. The business of the Company shall be managed by the Directors who may exercise all such powers of the Company as are not, from time to time by the Statute or by these Articles prohibited or inconsistent with the aforesaid or reserved to the Members; PROVIDED HOWEVER that no regulations made by the Company in general meeting shall invalidate any prior act of the Directors which would have been valid if that regulation had not been made.

74. The adoption of any resolution or the taking of any action of the Board shall require the affirmative votes of at least sixty percent (60%) of the Directors present at a duly constituted meeting of the Board, except when a larger vote is required by law or by these Articles. The requirement of at least sixty percent (60%) set forth in this Article 74 shall be amended to a majority, unless there are different requirements under applicable law or stock exchange rules or by these Articles, upon the closing of a Qualified Public Offering.

75. The Board may from time to time and at any time by powers of attorney appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Board, to be the attorney or attorneys of the Company for such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board under these Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorneys as the Board may think fit and may also authorise any such attorney to delegate all or any of the powers, authorities and discretions vested in him.

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76. All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may be in such manner as the Board shall from time to time by resolution determine.

77. The Board shall cause minutes to be made in books provided for the purpose:

(a) of all appointments of officers made by the Board;

(b) of the names of the Directors (including those represented thereat by an alternate or by proxy) present at each meeting of the Directors and of any committee of the Board;

(c) of all resolutions and proceedings at all meetings of the Company and of the Directors and of committees of Board.

78. The Board on behalf of the Company may pay a gratuity or pension or allowance on retirement to any Director who has held any other salaried office or place of profit with the Company or to his widow or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

79. The Board may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital or any part thereof and to issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or of any third party.

MANAGEMENT

80. (a) The Board may from time to time provide for the management of the affairs of the Company in such manner as it shall think fit and the provisions contained in the three next following paragraphs shall be without prejudice to the general powers conferred by this paragraph.

(b) The Board from time to time and at any time may establish any committees, local boards or agencies for managing any of the affairs of the Company and may appoint any persons to be members of such committees or local boards or any managers or agents and may fix their remuneration.

(c) The Board from time to time and at any time may delegate to any such committee, local board, manager or agent any of the powers, authorities and discretions for the time being vested in the Board and may authorise the members for the time being of any such local board, or any of them to fill up any vacancies therein and to act notwithstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Board may think fit and the Board may at any time remove any person so appointed and may annul or vary any such delegation, but no person dealing in good faith and without notice of any such annulment or variation shall be affected thereby.

(d) Any such delegates as aforesaid may be authorized by the Board to subdelegate all or any of the powers, authorities, and discretions for the time being vested in them.

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MANAGING DIRECTORS

81. The Board may, from time to time, appoint one or more Director (but not an alternate Director) to the office of Managing Director for such term and at such remuneration (whether by way of salary, or commission, or participation in profits, or partly in one way and partly in another) as they may think fit but his appointment shall be subject to determination ipso facto if he ceases from any cause to be a Director and no alternate Director appointed by him can act in his stead as a Director or Managing Director.

82. The Board may entrust to and confer upon a Managing Director any of the powers exercisable by it upon such terms and conditions and with such restrictions as it may think fit and either collaterally with or to the exclusion of its own powers and may from time to time revoke, withdraw, alter or vary all or any of such powers.

PROCEEDINGS OF DIRECTORS

83. Except as otherwise provided by these Articles, the Directors shall meet together for the dispatch of business, convening, adjourning and otherwise regulating their meetings as they think fit; provided, however, that the Directors shall so meet at least once every three (3) months. Subject to Article 74, questions arising at any meeting shall be decided by a majority of votes of the Directors and alternate Directors present at a meeting at which there is a quorum, the vote of an alternate Director not being counted if his appointor be present at such meeting. In case of an equality of votes, the Chairman shall have a second or casting vote.

84. A Director or alternate Director may, and the Secretary on the requisition of a Director or alternate Director shall, at any time summon a meeting of the Directors by at least two (2) days’ notice in writing to every Director and alternate Director which notice shall set forth the general nature of the business to be considered unless notice is waived by all the Directors (or their alternates) either at, before or after the meeting is held and PROVIDED FURTHER if notice is given in person, by fax the same shall be deemed to have been given on the day it is delivered to the Directors or transmitting organisation as the case may be. The provisions of Article 35 shall apply mutatis mutandis with respect to notices of meetings of Directors.

85. The quorum necessary for the transaction of the business of the Board may be fixed by the Board and unless so fixed shall be two (2), a Director and his appointed alternate Director being considered only one (1) person for this purpose, PROVIDED ALWAYS that if there shall at any time be only a sole Director the quorum shall be one. For the purposes of this Article an alternate Director or proxy appointed by a Director shall be counted in a quorum at a meeting at which the Director appointing him is not present.

86. The continuing Directors may act notwithstanding any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors the continuing Directors or Director may act for the purpose of increasing the number of Directors to that number, or of summoning a general meeting of the Company, but for no other purpose.

87. The Board may elect a Chairman of the Board and determine the period for which he is to hold office; but if no such Chairman is elected, or if at any meeting the Chairman is not present within five minutes after the time appointed for holding the same, the Directors present may choose one of their number to be Chairman of the meeting.

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88. The Board may delegate any of its powers to committees consisting of such member or members of the Board (including Alternate Directors in the absence of their appointors) as the Board thinks fit; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Board.

89. A committee may meet and adjourn as it thinks proper. Questions arising at any meeting shall be determined by a majority of votes of the members present, and in the case of an equality of votes the Chairman shall have a second or casting vote.

90. All acts done by any meeting of the Directors or of a committee of Directors (including any person acting as an alternate Director) shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any Director or alternate Director, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and qualified to be a Director or alternate Director as the case may be.

91. Members of the Board or of any committee thereof may participate in a meeting of the Board or of such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. A resolution in writing (in one or more counterparts), signed by all the Directors for the time being or all the members of a committee of Directors (an alternate Director being entitled to sign such resolution on behalf of his appointor) shall be as valid and effectual as if it had been passed at a meeting of the Board or committee as the case may be duly convened and held.

92. (a) A Director may be represented at any meetings of the Board by a proxy appointed by him in which event the presence or vote of the proxy shall for all purposes be deemed to be that of the Director.

(b) The provisions of Articles 55-60 shall mutatis mutandis apply to the appointment of proxies by Directors.

VACATION OF OFFICE OF DIRECTOR

93. The office of a Director shall be vacated:

(a) if he gives notice in writing to the Company that he resigns the office of Director;

(b) if he dies; or

(c) if he is found a lunatic or becomes of unsound mind.

APPOINTMENT AND REMOVAL OF DIRECTORS

94. Subject to Articles 62 and 93 of these Articles, the Company may by ordinary resolution appoint any person to be a Director and may in like manner remove any Director and may in like manner appoint another person in his stead.

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95. Subject to Articles 62 and 93 of these Articles, the Directors shall have power at any time and from time to time to appoint any person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors but so that the total amount of Directors (exclusive of alternate Directors) shall not at any time exceed the number fixed in accordance with these Articles.

PRESUMPTION OF ASSENT

96. A Director of the Company who is present at a meeting of the Board at which action on any Company matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the Minutes of the meeting or unless he shall file his written dissent from such action with the person acting as the Secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action.

SEAL

97. (a) The Company may, if the Directors so determine, have a Seal which shall, subject to paragraph (c) hereof, only be used by the authority of the Directors or of a committee of the Directors authorized by the Directors in that behalf, and every instrument to which the Seal has been affixed shall be signed by one person who shall be either a Director or the Secretary or Secretary-Treasurer or some person appointed by the Directors for the purpose.

(b) The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal or Seals each of which shall be a facsimile of the Common Seal of the Company and, if the Directors so determine, with the addition on its face of the name of every place where it is to be used.

(c) A Director, Secretary or other officer or representative or attorney may without further authority of the Directors affix the Seal of the Company over his signature alone to any document of the Company required to be authenticated by him under Seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever.

OFFICERS

98. The Company may have a President, a Secretary or Secretary-Treasurer appointed by the Directors who may also from time to time appoint such other officers as they consider necessary, all for such terms, at such remuneration and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors from time to time prescribe.

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DIVIDENDS, DISTRIBUTIONS AND RESERVE

99. Subject to the Statute and Article 5.2.5 of these Articles, the Directors may from time to time declare dividends (including interim dividends) and distributions on shares of the Company outstanding and authorise payment of the same out of the funds of the Company lawfully available therefore.

100. The Directors may, before declaring any dividends or distributions, set aside such sums as they think proper as a reserve or reserves which shall at the discretion of the Directors, be applicable for any purpose of the Company and pending such application may, at the like discretion, be employed in the business of the Company.

101. No dividend or distribution shall be payable except out of the profits of the Company, realised or unrealised, or out of the share premium account or as otherwise permitted by the Statute.

102. Subject to the rights of persons, if any, entitled to shares with special rights as to dividends or distributions, if dividends or distributions are to be declared on a class of shares they shall be declared and paid according to the amounts paid or credited as paid on the shares of such class outstanding on the record date for such dividend or distribution as determined in accordance with these Articles but no amount paid or credited as paid on a share in advance of calls shall be treated for the purpose of this Article as paid on the share.

103. The Directors may deduct from any dividend or distribution payable to any Member all sums of money (if any) presently payable by him to the Company on account of calls or otherwise.

104. Subject to Article 5.2.5, the Directors may declare that any dividend or distribution be paid wholly or partly by the distribution of specific assets and in particular of paid up shares, debentures, or debenture stock of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional certificates and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the footing of the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees as may seem expedient to the Directors.

105. Any dividend, distribution, interest or other monies payable in cash in respect of shares may be paid by cheque or warrant sent through the post directed to the registered address of the holder or, in the case of joint holders, to the holder who is first named on the register of Members or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts for any dividends, bonuses, or other monies payable in respect of the share held by them as joint holders.

106. No dividend or distribution shall bear interest against the Company.

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CAPITALIZATION

107. Subject to the provisions of these Articles, the Company may upon the recommendation of the Directors by ordinary resolution authorise the Directors to capitalise any sum standing to the credit of any of the Company’s reserve accounts (including share premium account and capital redemption reserve fund) or any sum standing to the credit of profit and loss account or otherwise available for distribution and to appropriate such sum to Members in the proportions in which such sum would have been divisible amongst them had the same been a distribution of profits by way of dividend and to apply such sum on their behalf in paying up in full unissued shares for allotment and distribution credited as fully paid up to and amongst them in the proportion aforesaid. In such event the Directors shall do all acts and things required to give effect to such capitalisation, with full power to the Directors to make such provisions as they think fit for the case of shares becoming distributable in fractions (including provisions whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors may authorise any person to enter on behalf of all of the Members interested into an agreement with the Company providing for such capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned.

BOOKS OF ACCOUNT

108. The Directors shall cause proper books of account to be kept with respect to:

(a) all sums of money received and expended by the Company and the matters in respect of which the receipt or expenditure takes place;

(b) all sales and purchases of goods by the Company; and

(c) the assets and liabilities of the Company.

Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the Company’s affairs and to explain its transactions.

109. Subject to Article 5.2 of these Articles, the Directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members not being Directors and no Member (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred by Statute, Article 5.2 of these Articles, or authorized by the Directors or by the Company in general meeting.

110. The Directors may from time to time cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law.

AUDIT

111. The Company may at any annual general meeting appoint an Auditor or Auditors of the Company who shall hold office until the next annual general meeting and may fix his or their remuneration.

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112. The Directors may before the first annual general meeting appoint an Auditor or Auditors of the Company who shall hold office until the first annual general meeting unless previously removed by an ordinary resolution of the Members in general meeting in which case the Members at that meeting may appoint Auditors. The Directors may fill any casual vacancy in the office of Auditor but while any such vacancy continues the surviving or continuing Auditor or Auditors, if any, may act. The remuneration of any Auditor appointed by the Directors under this Article may be fixed by the Directors.

113. Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and Officers of the Company such information and explanation as may be necessary for the performance of the duties of the auditors.

114. Auditors shall at the next annual general meeting following their appointment and at any other time during their term of office, upon request of the Directors or any general meeting of the Members, make a report on the accounts of the Company in general meeting during their tenure of office.

NOTICES

115. Notices shall be in writing and may be given by the Company to any Member either personally or by sending it by post or telecopy to him or to his address as shown in the register of Members, such notice, if mailed, to be forwarded airmail if the address be outside the Cayman Islands.

116. (a) Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, pre-paying and posting a letter containing the notice, and to have been effected at the expiration of sixty (60) hours after the letter containing the same is posted as aforesaid.

(b) Where a notice is sent by telecopy or electronic message, service of the notice shall be deemed to be effected by properly addressing, and sending such notice through a transmitting organisation and to have been effected on the day the same is sent as aforesaid.

117. A notice may be given by the Company to the joint holders of record of a share by giving the notice to the joint holder first named on the register of Members in respect of the share.

118. A notice may be given by the Company to the person or persons which the Company has been advised are entitled to a share or shares in consequence of the death or bankruptcy of a Member by sending it through the post as aforesaid in a pre-paid letter addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred.

119. Notice of every general meeting shall be given in any manner hereinbefore authorized to:

(a) every person shown as a Member in the register of Members as of the record date for such meeting except that in the case of joint holders the notice shall be sufficient if given to the joint holder first named in the register of Members.

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(b) every person upon whom the ownership of a share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of a Member of record where the Member of record but for his death or bankruptcy would be entitled to receive notice of the meeting; and

No other person shall be entitled to receive notices of general meetings.

WINDING UP

120. Subject to Articles 5.2.4, 5.2.5 and any other applicable provision of these Articles, if the Company shall be wound up the liquidator may, with the sanction of a Special Resolution of the Company and any other sanction required by the Statute, divide amongst the Members in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for such purpose set such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Members or different classes of Members. The liquidator may with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any shares or other securities whereon there is any liability.

121. If the Company shall be wound up, and the assets available for distribution amongst the Members as such shall be insufficient to repay the whole of the paid-up capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up on the shares held by them respectively. And if in a winding up the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall be distributed amongst the Members in proportion to the capital paid up at the commencement of the winding up on the shares held by them respectively. This Article is to be without prejudice to the rights of the holders of shares issued upon special terms and conditions.

INDEMNITY

122. The Directors and officers for the time being of the Company and any trustee for the time being acting in relation to any of the affairs of the Company and their heirs, executors, administrators and personal representatives respectively shall be indemnified out of the assets of the Company from and against all actions, proceedings, costs, charges, losses, damages and expenses which they or any of them shall or may incur or sustain by reason of any act done or omitted in or about the execution of their duty in their respective offices or trusts, except such (if any) as they shall incur or sustain by or through their own willful neglect or default respectively and no such Director, officer or trustee shall be answerable for the acts, receipts, neglects or defaults of any other Director, officer or trustee or for joining in any receipt for the sake of conformity or for the solvency or honesty of any banker or other persons with whom any monies or effects belonging to the Company may be lodged or deposited for safe custody or for any insufficiency of any security upon which any monies of the Company may be invested or for any other loss or damage due to any such cause as aforesaid or which may happen in or about the execution of his office or trust unless the same shall happen through the willful neglect or default of such Director, Officer or trustee.

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FINANCIAL YEAR

123. Unless the Directors otherwise prescribe, the financial year of the Company shall end on 31st December in each year and, following the year of incorporation, shall begin on 1st January in each year.

TRANSFER BY WAY OF CONTINUATION

124. If the Company is exempted as defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution, have the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.

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Exhibit A

Shareholders’ Agreement

Exhibit B

Equity Control and Service Agreements

EX-4.2

Exhibit 4.2

Youku.com Inc.

No.                     

This is to Certify that                                          of                                                               is the Registered Proprietor of                      Ordinary Shares of                                          each numbered                                          -                                          inclusive, in the above-named Company subject to the Memorandum and Articles of Association thereof.

Executed as a Deed by the Company

dated          day of             , 20    

Director

In the Presence of:                                         

EX-4.4

Exhibit 4.4

EXECUTION VERSION

Dated 9 September 2010

AMENDED AND RESTATED

SHAREHOLDERS’ AGREEMENT

Youku.com Inc.

(a company incorporated in the Cayman Islands)

CONTENTS

1.	DEFINITIONS AND INTERPRETATION	13
2.	RIGHTS OF FIRST REFUSAL; CO-SALE RIGHTS AND OTHER TRANSFER RESTRICTIONS	19
3.	DRAG ALONG RIGHTS	25
4	REGISTRATION RIGHTS	26
5.	PRE-EMPTIVE RIGHT	40
6.	INFORMATION RIGHTS	41
7.	CONVERSION RIGHTS	42
8.	DIVIDEND RIGHTS	42
9.	LIQUIDATION RIGHTS	42
10.	BOARD; VOTING RIGHTS	42
11.	EQUITY CONTROL AND SERVICE AGREEMENTS	45
12.	MISCELLANEOUS	45

Amended and Restated Shareholders’ Agreement

THIS AGREEMENT (this “Agreement”) is made 9 September 2010.

BY AND AMONG:

1. Youku.com Inc., a Cayman Islands exempted company organized and existing under the laws of the Cayman Islands, with its registered office at Scotia Centre, 4^th Floor, P.O. Box 2804, George Town, Grand Cayman, Cayman Islands (the “Company”);

2. 1Look Holdings Ltd., a British Virgin Islands company organized and existing under the laws of the British Virgin Islands, with its registered office at P.O. box 957 Offshore Incorporations Center, Road Town, Tortola, British Virgin Islands (“Founder” or “Ordinary Shareholder”);

3. Farallon Capital Partners, L.P., a limited partnership organized and existing under the laws of the State of California, with its registered office at One Maritime Plaza, Suite 2100, San Francisco, CA 94111;

4. Farallon Capital Institutional Partners, L.P., a limited partnership organized and existing under the laws of the State of California, with its registered office at One Maritime Plaza, Suite 2100, San Francisco, CA 94111;

5. Farallon Capital Institutional Partners II, L.P., a limited partnership organized and existing under the laws of the State of California, with its registered office at One Maritime Plaza, Suite 2100, San Francisco, CA 94111;

6. Farallon Capital Institutional Partners III, L.P., a limited partnership organized and existing under the laws of the State of Delaware, with its registered office at One Maritime Plaza, Suite 2100, San Francisco, CA 94111;

7. Farallon Capital Offshore Investors II, L.P., a limited partnership organized and existing under the laws of the Cayman Islands, with its registered office at Harbour Centre, P.O. Box 896, George Town, Grand Cayman, Cayman Islands;

8. Chengwei Partners, L.P., a limited partnership organized and existing under the laws of the Cayman Islands, with its registered office at M&C Corporate Services Limited, PO Box 309 GT, Ugland House, Grand Cayman, Cayman Islands;

9. Chengwei Ventures Evergreen Fund, L.P., a limited partnership organized and existing under the laws of the Cayman Islands, with its registered office at M&C Corporate Services Limited, PO Box 309 GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands;

10. Chengwei Ventures Evergreen Advisors Fund, LLC, a company organized and existing under the laws of the Cayman Islands, with its registered office at M&C Corporate Services Limited, PO Box 309 GT, Ugland House, South Church Street, George Town Grand Cayman, Cayman Islands;

Persons named in items 3-10 above are hereinafter collectively referred to as the “Series A Shareholders” or individually as “Series A Shareholder”;

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11. Chengwei Partners, L.P., a limited partnership organized and existing under the laws of the Cayman Islands, with its registered office at M&C Corporate Services Limited, PO Box 309 GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands;

12. Chengwei Ventures Evergreen Fund, L.P., a limited partnership organized and existing under the laws of Cayman Islands, with its registered office at M&C Corporate Services Limited, PO Box 309 GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands;

13. Chengwei Ventures Evergreen Advisors Fund, LLC, a company organized and existing under the laws of Cayman Islands, with its registered office at M&C Corporate Services Limited, PO Box 309 GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands; (items 11-13 collectively may hereinafter be referred to as “Chengwei Ventures”);

14. Farallon Capital Partners, L.P., a limited partnership organized and existing under the laws of the State of California, with its registered office at One Maritime Plaza, Suite 2100, San Francisco, CA 94111;

15. Farallon Capital Institutional Partners, L.P., a limited partnership organized and existing under the laws of the State of California, with its registered office at One Maritime Plaza, Suite 2100, San Francisco, CA 94111;

16. Farallon Capital Institutional Partners II, L.P., a limited partnership organized and existing under the laws of the State of California, with its registered office at One Maritime Plaza, Suite 2100, San Francisco, CA 94111;

17. Farallon Capital Institutional Partners III, L.P., a limited partnership organized and existing under the laws of the State of Delaware, with its registered office at One Maritime Plaza, Suite 2100, San Francisco, CA 94111;

18. Farallon Capital Offshore Investors II, L.P., a limited partnership organized and existing under the laws of the Cayman Islands, with its registered office at Harbour Centre, P.O. Box 896, George Town, Grand Cayman, Cayman Islands (items 14-18 collectively may hereinafter be referred to as “Farallon”);

19. Sutter Hill Ventures, a private limited partnership organized and existing under the laws of the State of California, with its registered office at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005;

20. David L. Anderson, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 057612082;

21. Anvest, L.P., a private limited partnership organized and existing under the laws of the State of California, with its registered office at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005;

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22. G. Leonard Baker Jr., a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 056873999;

23. Saunders Holdings, L.P., a private limited partnership organized and existing under the laws of the State of California, with its registered office at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005;

24. William H. Younger, Jr., a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 157510588;

25. Lauren L. Younger, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 208378624;

26. Tench Coxe, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 200001689;

27. Gregory P. Sands, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 055098871;

28. James C. Gaither, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 207193346;

29. James N. White, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 054344007;

30. Jeffrey W. Bird, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 054819689;

31. David E. Sweet, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 155995834;

32. Sherryl W. Casella, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 217145909;

33. Lynne B. Graw, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 207372928;

34. Diane J. Naar, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 203362073;

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35. Patricia Tom, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 203142939;

36. Robert Yin, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 212909282;

37. The Board of Trustees of the Leland Stanford Junior University (DAPER1), a trust with corporate powers incorporated under the laws of the State of California, with its registered address at 2770 Sand Hill Road, Menlo Park, CA 94025;

38. The Board of Trustees of the Leland Stanford Junior University (SBST), a trust with corporate powers incorporated under the laws of the State of California, with its registered address at 2770 Sand Hill Road, Menlo Park, CA 94025; (items 36 and 37 may hereinafter be referred to as “Leland Stanford”);

Persons named in items 11-38 above are hereinafter referred to collectively as the “Series B Shareholders” and individually as “Series B Shareholder”;

39. Brookside Capital Partners Fund, L.P. (“Brookside”);

40. Jaewoong Lee, a citizen of the Republic of Korea, domiciled at B-2301 Heights Park, 632 Shinsa-dong, Gangnam-gu, Seoul, 135, Korea, with a passport number of KN0747385;

41. Sutter Hill Ventures, a private limited partnership organized and existing under the laws of the State of California, with its registered office at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005;

42. David L. Anderson, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 057612082;

43. Anvest, L.P., a private limited partnership organized and existing under the laws of the State of California, with its registered office at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005;

44. G. Leonard Baker Jr., a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 056873999;

45. Saunders Holdings, L.P., a private limited partnership organized and existing under the laws of the State of California, with its registered office at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005;

46. William H. Younger, Jr., a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 157510588;

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47. Lauren L. Younger, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 208378624;

48. Tench Coxe, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 200001689;

49. Gregory P. Sands, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 055098871;

50. James C. Gaither, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 207193346;

51. James N. White, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 054344007;

52. Jeffrey W. Bird, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 054819689;

53. David E. Sweet, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 155995834;

54. Sherryl W. Casella, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 217145909;

55. Lynne B. Graw, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 207372928;

56. Diane J. Naar, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 203362073;

57. Patricia Tom, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 203142939;

58. Robert Yin, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 212909282;

59. Yovest, L.P., a private limited partnership organized and existing under the laws of the State of California, with its registered office at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005;

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60. Andrew T. Sheehan, a citizen of the United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 220308528;

61. Yu-Ying Chiu Chen, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 213784828;

Leland Stanford, Farallon, Chengwei Ventures and the Persons named in items 39-61 above are hereinafter referred to collectively as the “Series C Shareholders” and individually as “Series C Shareholder”;

62. Maverick Fund Private Investments, Ltd., an exempted company organized and existing under the laws of the Cayman Islands, with its registered office at P.O. Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands (“Maverick Fund”);

63. Maverick USA II, Corp., a corporation organized and existing under the laws of the State of Delaware, with its registered office at 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801 (“Maverick Fund USA”);

64. Maverick II Holdings, Ltd., an exempted company organized and existing under the laws of the Cayman Islands, with its registered office at P.O. Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands (“Fund II” and, together with Maverick Fund and Maverick Fund USA, “Maverick”);

65. Venture Lending & Leasing IV, LLC, a limited liability company organized and existing under the laws of the State of Delaware, with its registered office at 2010 N. First Street, Suite 310, San Jose, CA 95131;

66. Venture Lending & Leasing V, LLC, a limited liability company organized and existing under the laws of the State of Delaware, with its registered office at 2010 N. First Street, Suite 310, San Jose, CA 95131;

67. Gregory P. Arrese, a citizen of the United States of America, domiciled at 53 Old Roaring Brook Rd., Mount Kisco, NY 10549, with a passport number of 203101591;

68. Steven D. Abbott, a citizen of the United States of America, domiciled at 78 Trinidad Drive, Tiburon, CA 94920, with a passport number of 435930040;

69. Garry Edward Menzel, a citizen of the United Kingdom, domiciled at 82 Trinidad Drive, Tiburon, CA 94920, with a passport number of 705096646;

70. Sutter Hill Ventures, a private limited partnership organized and existing under the laws of the State of California, with its registered office at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005;

71. David L. Anderson, a citizen of United States of America, domiciled at755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, United States of America, and his passport number 057612082;

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72. G. Leonard Baker Jr., a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 056873999;

73. Saunders Holdings, L.P., a private limited partnership organized and existing under the laws of the State of California, with its registered office at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005;

74. Yovest, L.P., a private limited partnership organized and existing under the laws of the State of California, with its registered office at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005;

75. Tench Coxe, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 200001689;

76. Gregory P. Sands, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 055098871;

77. James C. Gaither, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 207193346;

78. James N. White, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 054344007;

79. Jeffrey W. Bird, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 054819689;

80. Andrew T. Sheehan, a citizen of the United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 220308528;

81. David E. Sweet, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 155995834;

82. Sherryl W. Casella, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 217145909;

83. Lynne B. Graw, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 207372928;

84. Diane J. Naar, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 203362073;

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85. Yu-Ying Chiu Chen, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 213784828;

86. Patricia Tom, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 203142939;

87. Robert Yin, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 212909282;

Brookside, Leland Stanford, Farallon, Chengwei Ventures, Maverick and the Persons named in items 62-87 above are hereinafter referred to collectively as the “Series D Shareholders” and individually as “Series D Shareholder”;

88. Sutter Hill Ventures, a private limited partnership organized and existing under the laws of the State of California, with its registered office at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005;

89. Anvest, L.P., a private limited partnership organized and existing under the laws of the State of California, with its registered office at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005;

90. Saunders Holdings, L.P., a private limited partnership organized and existing under the laws of California, with its registered office at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, United States of America;

91. Rooster Partners, LP, a private limited partnership organized and existing under the laws of the State of California, with its registered office at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005;

92. Gregory P. Sands, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 055098871;

93. James N. White, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 054344007;

94. Jeffrey W. Bird, a citizen of United States of America, domiciled at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 054819689;

95. Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO David L. Anderson. Wells Fargo Bank, N.A. is the trustee of SHV Profit Sharing Plan, an employer sponsored retirement plan. David L. Anderson, a citizen of the United States of America, with a mailing address at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 057612082, is a plan participant;

96. Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO G. Leonard Baker, Jr. Wells Fargo Bank, N.A. is the trustee of SHV Profit Sharing Plan, an employer sponsored retirement plan. G. Leonard Baker, Jr., a citizen of the United States of America, with a mailing address at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 056873999, is a plan participant;

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97. Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO William H. Younger, Jr. Wells Fargo Bank, N.A. is the trustee of SHV Profit Sharing Plan, an employer sponsored retirement plan. William H. Younger, Jr., a citizen of the United States of America, with a mailing address at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 432788433, is a plan participant;

98. Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Tench Coxe. Wells Fargo Bank, N.A. is the trustee of SHV Profit Sharing Plan, an employer sponsored retirement plan. Tench Coxe, a citizen of the United States of America, with a mailing address at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 448591979, is a plan participant;

99. Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Andrew T. Sheehan. Wells Fargo Bank, N.A. is the trustee of SHV Profit Sharing Plan, an employer sponsored retirement plan. Andrew T. Sheehan, a citizen of the United States of America, with a mailing address at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 220308528, is a plan participant;

100. Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO David E. Sweet (Rollover). Wells Fargo Bank, N.A. is the trustee of SHV Profit Sharing Plan, an employer sponsored retirement plan. David E. Sweet, a citizen of the United States of America, with a mailing address at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 221409204, is a plan participant;

101. Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Sherryl W. Casella. Wells Fargo Bank, N.A. is the trustee of SHV Profit Sharing Plan, an employer sponsored retirement plan. Sherryl W. Casella, a citizen of the United States of America, with a mailing address at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 217145909, is a plan participant;

102. Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Lynne B. Graw. Wells Fargo Bank, N.A. is the trustee of SHV Profit Sharing Plan, an employer sponsored retirement plan. Lynne B. Graw, a citizen of the United States of America, with a mailing address at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 427968686, is a plan participant;

103. Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Diane J. Naar. Wells Fargo Bank, N.A. is the trustee of SHV Profit Sharing Plan, an employer sponsored retirement plan. Diane J. Naar, a citizen of the United States of America, with a mailing address at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 203362073, is a plan participant;

104. Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Yu-Ying Chen. Wells Fargo Bank, N.A. is the trustee of SHV Profit Sharing Plan, an employer sponsored retirement plan. Yu-Ying Chen, a citizen of the United States of America, with a mailing address at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 213784826, is a plan participant;

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105. Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Patricia Tom (Rollover). Wells Fargo Bank, N.A. is the trustee of SHV Profit Sharing Plan, an employer sponsored retirement plan. Patricia Tom, a citizen of the United States of America, with a mailing address at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 203142939, is a plan participant;

106. Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Robert Yin. Wells Fargo Bank, N.A. is the trustee of SHV Profit Sharing Plan, an employer sponsored retirement plan. Robert Yin, a citizen of the United States of America, with a mailing address at 755 Page Mill Road, Suite A-200, Palo Alto, CA 94304-1005, with a passport number of 212909282, is a plan participant.

Brookside, Chengwei Ventures, Maverick Fund, Maverick Fund USA, Leland Stanford and the Persons named in items 88-106 above are hereinafter referred to collectively as the “Series E Shareholders” and individually as “Series E Shareholder”;

107. T. Rowe Price New Horizons Fund, Inc., a registered investment company with its registered office at 100 East Pratt Street, Baltimore, Maryland 21202;

108. T. Rowe Price New Horizons Trust, a registered investment company with its registered office at 100 East Pratt Street, Baltimore, Maryland 21202;

109. T. Rowe Price U.S. Equities Trust, a common trust fund with its registered office at 100 East Pratt Street, Baltimore, Maryland 21202;

110. T. Rowe Price Global Technology Fund, Inc., a registered investment company with its registered office at 100 East Pratt Street, Baltimore, Maryland 21202;

111. T. Rowe Price Science & Technology Fund, Inc., a registered investment company with its registered office at 100 East Pratt Street, Baltimore, Maryland 21202;

112. TD Mutual Funds – TD Science & Technology Fund, a registered investment company whose subadvisor is T. Rowe Price Associates, Inc., with its registered office at 100 East Pratt Street, Baltimore, Maryland 21202;

113. VALIC Company I – Science & Technology Fund, a registered investment company whose subadvisor is T. Rowe Price Associates, Inc., with its registered office at 100 East Pratt Street, Baltimore, Maryland 21202;

114. John Hancock Trust – Science & Technology Trust, a registered investment company whose subadvisor is T. Rowe Price Associates, Inc., with its registered office at T. Rowe Price Associates, Inc., 100 East Pratt Street, Baltimore, Maryland 21202;

115. MORGAN STANLEY INVESTMENT MANAGEMENT SMALL COMPANY GROWTH TRUST, a Group Trust created under the laws of the Commonwealth of Massachusetts to hold funds of qualified employee benefit plans and certain government plans, with a mailing address of: c/o Morgan Stanley Investment Management Inc., 522 Fifth Avenue, New York, New York 10036;

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116. MORGAN STANLEY INSTITUTIONAL FUND, INC. – SMALL COMPANY GROWTH PORTFOLIO, a portfolio of Morgan Stanley Institutional Fund, Inc., a U.S. registered open-end investment company, established as a Maryland corporation, with its registered office at 522 Fifth Avenue, New York, New York 10036;

117. THE UNIVERSAL INSTITUTIONAL FUNDS, INC. – SMALL COMPANY GROWTH PORTFOLIO, a portfolio of The Universal Institutional Funds, Inc., a U.S. registered open-end investment company, established as a Maryland corporation, with its registered office at 522 Fifth Avenue, New York, New York 10036;

118. NATIONWIDE VARIABLE INSURANCE TRUST – NVIT MULTI-MANAGER SMALL COMPANY FUND a portfolio of Nationwide Variable Insurance Trust, a U.S. registered open-end investment company, established as a Delaware Statutory Trust, with a mailing address of: c/o Morgan Stanley Investment Management Inc., 522 Fifth Avenue, New York, New York 10036;

119. TRANSAMERICA FUNDS – TRANSAMERICA MORGAN STANLEY SMALL COMPANY GROWTH, a portfolio of Transamerica Funds, a U.S. registered open-end investment company, established as a Delaware Statutory Trust, with a mailing address of: c/o Morgan Stanley Investment Management Inc., 522 Fifth Avenue, New York, New York 10036;

120. BELL ATLANTIC MASTER TRUST, a Master Pension Trust established as a medium for the commingled investment and administration of certain assets of certain defined benefit, defined contribution and tax qualified plans established by Bell Atlantic and certain predecessor entities and/or their affiliates, with a mailing address of: c/o Morgan Stanley Investment Management Inc., 522 Fifth Avenue, New York, New York 10036;

121. MORGAN STANLEY INSTITUTIONAL FUND, INC. – INTERNATIONAL OPPORTUNITY PORTFOLIO, a portfolio of Morgan Stanley Institutional Fund, Inc., a U.S. registered open-end investment company, established as a Maryland corporation, with its registered office at 522 Fifth Avenue, New York, New York 10036;

122. MORGAN STANLEY INSTITUTIONAL FUND, INC. – GLOBAL GROWTH PORTFOLIO, a portfolio of Morgan Stanley Institutional Fund, Inc., a U.S. registered open-end investment company, established as a Maryland corporation, with its registered office at 522 Fifth Avenue, New York, New York 10036.

Farallon, Chengwei Ventures, Brookside, Maverick Fund USA and the Persons named in items 107-122 above are hereinafter referred to collectively as the “Series F Shareholders” and individually as “Series F Shareholder”;

Persons named in items 3-122 above are hereinafter referred to collectively as the “Preferred Shareholders” and individually as “Preferred Shareholder”; and

The Company, the Founder, the Preferred Shareholders may hereinafter, as appropriate, collectively be referred to as the “Parties” and individually referred to as a “Party”.

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WHEREAS,

A. The Series A Shareholders own 82,500,000 Series A convertible preferred shares, at the par value of US$0.00001 per share (“Series A Preferred Shares”). The Series B Shareholders own 165,825,000 class B-1 preferred shares, at the par value of US$0.00001 per share (“Series B-1 Preferred Shares”) and 112,875,000 class B-2 preferred shares at the par value of US$0.00001 per share (“Series B-2 Preferred Shares” together with Series B-1 Preferred Shares are hereinafter referred to as “Series B Preferred Shares”). The Series C Shareholders own 308,770,154 Series C Preferred Shares, and Venture Lending & Leasing IV, LLC and Venture Lending & Leasing V, LLC own a warrant to purchase up to 8,523,082 Series C preferred shares, at the par value of US$0.00001 per share (“Series C Preferred Shares”). The Series D Shareholders own 209,737,212 Series D preferred shares, at the par value of US$0.00001 per share (“Series D Preferred Shares”). The Series E Shareholders own 209,849,890 Series E preferred shares, and Venture Lending & Leasing V, LLC and Venture Lending & Leasing VI, LLC own a warrant to purchase up to 3,929,774 Series E preferred shares, at the par value of US$0.00001 per share (“Series E Preferred Shares”). The Series F Shareholders own 100,465,709 Series F preferred shares, at the par value of US$0.00001 per share (“Series F Preferred Shares”).

B. The Company, the Founder, the Series A Shareholders and the Series B Shareholders entered into a shareholders’ agreement dated as of 11 December 2006 (“December 2006 Shareholders’ Agreement”).

C. The Company, the Founder, the Series A Shareholders, the Series B Shareholders and the Series C Shareholders entered into a shareholders’ agreement dated as of 20 November 2007, which terminated, superseded, and replaced in its entirety the December 2006 Shareholders’ Agreement (“November 2007 Shareholders’ Agreement”).

D. The Company, the Founder, the Series A Shareholders, the Series B Shareholders, the Series C Shareholders and the Series D Shareholders entered into a shareholders’ agreement dated as of 20 June 2008, which terminated, superseded, and replaced in its entirety the November 2007 Shareholders’ Agreement (“June 2008 Shareholders’ Agreement”).

E. The Company, the Founder, the Series A Shareholders, the Series B Shareholders, the Series C Shareholders, the Series D Shareholders and the Series E Shareholders entered into a shareholders’ agreement dated as of 25 November 2009, which terminated, superseded, and replaced in its entirety the June 2008 Shareholders’ Agreement (“Prior Shareholders’ Agreement”).

F. In connection with the closing of the Share Purchase Agreement of even date hereof by and among the Company, the Founder, and the Series F Shareholders, the Parties hereto desire to enter into this Agreement to terminate, supersede and replace in its entirety the Prior Shareholders’ Agreement, and to waive any and all rights, preferences, privileges and restrictions contemplated thereunder. The Shareholders have agreed, inter alia, to make certain provisions for the governance, management and operations of the Company and for the rights and obligations between and among the Shareholders of the Company, upon the terms and subject to the conditions of this Agreement.

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NOW, THEREFORE, in consideration of the premises set forth above, the mutual promises and covenants set forth herein and other good and valuable consideration, the Parties hereto hereby agree as follows:

1. DEFINITIONS AND INTERPRETATION

1.1 Definitions.

“Affiliate” with regard to a given Person, means a Person that controls, is controlled by or is under common control with the given Person. For purposes of this Agreement, except as otherwise expressly provided, when used with respect to any Person, “control” means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “affiliated”, “controlling” and “controlled” have meanings correlative to the foregoing;

“Applicable Securities Law” means (i) with respect to any offering of securities in the United States, or any other act or omission within that jurisdiction, the securities law of the United States, as amended from time to time, including the Securities Exchange Act of 1934, as amended, and the Securities Act, and any applicable law of any State of the United States, and (ii) with respect to any offering of securities in any jurisdiction other than the United States, or any related act or omission in that jurisdiction, the applicable laws of that jurisdiction;

“Board of Directors” means the board of directors of the Company;

“Brookside” has the meaning as set forth in the recitals;

“Business Day” means a Business Day (other than a Saturday or Sunday) on which licensed banks are generally open in the PRC for general banking business;

“Chengwei Ventures” has the meaning as set in the recitals;

“Commission” means (i) with respect to any offering of securities in the United States, the Securities and Exchange Commission of the United States or any other federal agency at the time administering the Securities Act, and (ii) with respect to any offering of securities in a jurisdiction other than the United States, the regulatory body of the jurisdiction with authority to supervise and regulate the sale of securities in that jurisdiction;

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“Company” has the meaning set forth in the recitals;

“Director(s)” means the director(s) of the Board of Directors;

“Equity Control and Service Agreements” means the equity control and service agreements attached hereto as Exhibit A.

“Equity Securities” means any Ordinary Shares or Ordinary Share Equivalents;

“Farallon” has the meaning as set forth in the recitals;

“HKIAC” means Hong Kong International Arbitration Centre;

“Holder(s)” means holder(s) of the Preferred Shares, i.e. persons registered in the Company’s register of members as the holder of Preferred Shares, and a permitted transferee and assignee of any Holder(s) or the holder(s) of the beneficial interest of the Preferred Shares;

“Initiating Holder” means, with respect to a request duly made under Section 4.1 or Section 4.2 to register any Registrable Securities, the Holder initiating such request;

“Issuance Notice” has the meaning set forth in Section 5.1;

“Leland Stanford” has the meaning as set forth in the recitals;

“Maverick” has the meaning set forth in the recitals;

“Morgan Stanley” means Morgan Stanley Investment Management Inc.

“Morgan Stanley Holder” means a Holder that holds its Preferred Shares through a Morgan Stanley discretionary client account;

“New M&AA” means the Amended and Restated Memorandum and Articles of Association of the Company attached as Exhibit 2 to the Share Purchase Agreement;

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“New Securities” shall mean any Equity Securities issued in the capital of the Company after the date of this Agreement; provided that the term “New Securities” does not include (a) any restricted stock and options to purchase up to 140,441,231 Ordinary Shares which may be issued pursuant to the ESOP; (b) any securities issued in connection with any share dividend, subdivision, combination or reclassification of capital stock; (c) any securities issued upon exercise, conversion or exchange of any Preferred Shares then outstanding; (d) any securities issued in connection with an acquisition, approved by the Board of Directors (including the affirmative vote of no less than two (2) Directors nominated by the Preferred Shareholders), by the Company or any of its Subsidiaries; (e) securities issued in connection with the warrants issued to Venture Lending & Leasing IV, LLC and Venture Lending & Leasing V, LLC for the purchase of up to 8,523,082 Series C Preferred Shares, or in connection with warrants issued to Venture Lending & Leasing V, LLC and Venture Lending & Leasing VI, LLC for the purchase of up to 3,929,774 series E Preferred Shares; (f) Ordinary Shares issued in a Qualified Public Offering, and (g) capital shares of the Company issued in connection with a strategic partnership or joint venture that has been approved by the Board of Directors (including the affirmative vote of no less than two (2) Directors nominated by the Preferred Shareholders) and is not a private equity, venture capital or similar financing.

“Ordinary Shares” means the Ordinary Shares of a par value of US$0.00001 each in the share capital of the Company;

“Ordinary Shareholder” means a holder of Ordinary Shares;

“Ordinary Share Equivalents” means warrants, options and rights directly or indirectly exercisable for Ordinary Shares and instruments, including without limitation the Preferred Shares, directly or indirectly convertible or exchangeable for Ordinary Shares;

“Original Issue Price” means US$0.05 for the Series A Preferred Shares, US$0.03636364 for the Series B-1 Preferred Shares, US$0.05333333 for the Series B-2 Preferred Shares, US$0.081128308 for the Series C Preferred Shares, US$0.143036134 for the Series D Preferred Shares, US$0.190850707 for the Series E Preferred Shares and US$0.49768225 for the Series F Preferred Shares; or the aggregate amount of issue price based on such price per share, where context requires and where applicable;

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“Person” means any individual, person corporate, corporation, partnership, limited partnership, proprietorship, association, limited liability company, firm, trust, estate or enterprise or entity;

“PRC” means the People’s Republic of China, for the purpose of this Agreement, excluding the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan;

“Preferred Shares” means the Series A Preferred Shares, the Series B Preferred Shares, the Series C Preferred Shares, the Series D Preferred Shares, the Series E Preferred Shares and the Series F Preferred Shares;

“Preferred Shareholder” shall have the meaning set forth in the recitals;

“Prior Shareholders’ Agreement” shall have the meaning set forth in the recitals;

“Qualified Public Offering” shall have the meaning ascribed to such term in the New M&AA;

“Registrable Securities” means (i) the Preferred Shares, (ii) the Ordinary Shares directly or indirectly issuable or issued upon conversion of the Preferred Shares, (iii) any Equity Securities of the Company directly or indirectly issued as (or issuable upon the conversion, exchange or exercise of any Ordinary Share Equivalent) a dividend or other distribution with respect to, or in exchange for, or in replacement of, the shares referenced in (i) and (ii) and (iv) any other Ordinary Shares held by the Holders, excluding in all cases, however, any Registrable Securities sold by a Person in a transaction other than an assignment pursuant to Section 4.5(5);

“Registration” means a registration effected by preparing and filing a Registration Statement and the declaration or ordering of the effectiveness of that Registration Statement; and the terms “Register” and “Registered” have meanings concomitant with the foregoing;

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“Registration Statement” means a registration statement prepared on Form F-1 or F-3 under the Securities Act, or on any comparable form in connection with registration in a jurisdiction other than the United States;

“Sale Transaction” shall have the meaning ascribed to such term in the New M&AA;

“Sale Transaction Notice” shall have the meaning set forth in Section 3.1;

“Securities” means shares, equity interests, debentures, stocks, bonds, notes, units, warrants, options, derivative instruments or any other instrument of whatsoever nature which may be converted into and/or give rise to any rights in respect of or relating to shares or any equity interest or any other interests or securities, in or of the Company (or, where applicable, the holding company of the Company);

“Securities Act” means the United States Securities Act of 1933, as amended;

“Selling Expenses” means all underwriting discounts and selling commissions applicable to the sale of Registrable Securities pursuant to this Agreement;

“Selling Shareholder” has the meaning set forth in Section 2.1(3);

“Series A Preferred Share(s)” has the meaning as set forth in the recitals;

“Series B Preferred Share(s)” has the meaning as set forth in the recitals;

“Series B-1 Preferred Share(s)” has the meaning as set forth in the recitals;

“Series B-2 Preferred Share(s)” has the meaning as set forth in the recitals;

“Series C Preferred Share(s)” has the meaning as set forth in the recitals;

“Series D Preferred Share(s)” has the meaning as set forth in the recitals;

“Series E Preferred Share(s)” has the meaning as set forth in the recitals;

“Series F Preferred Share(s)” has the meaning as set forth in the recitals;

“Shares” means any share(s) of the Company;

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“Share Offered by Transferor” has the meaning set forth in Section 2.1(2);

“Share Purchase Agreement” means the Share Purchase Agreement, dated the same date hereof among the Company and the Series F Investors (as defined therein);

“Shareholder(s)” means a holder of Share(s) of the Company from time to time, for the avoidance of doubt, excluding the Morgan Stanley Holders and the T. Rowe Price Holders but including those Persons holding beneficial title to those Series F Preferred Shares the legal title of which is held in the name of the Morgan Stanley Holders and the T. Rowe Price Holders;

“Subsidiaries” with respect to any person that is not an individual, any corporation, partnership, or other entity controlled by such person (and each a “Subsidiary”);

“Sutter Hill” means the Persons named in items 19-36, items 59-61, item 91 and items 95-106 of the Recitals;

“T. Rowe Price” means T. Rowe Price Associates, Inc., a registered investment advisor;

“T. Rowe Price Holder” means a Holder who holds its Preferred Shares in an investment account for which T. Rowe Price is the investment advisor;

“Transfer” has the meaning set forth in Section 2.1(2)(a);

“Transfer Notice” has the meaning set forth in Section 2.1(2);

“Transferor” has the meaning set forth in Section 2.1(2);

“US and United States” means the United States of America;

“US GAAP” means generally accepted accounting principles in the United States;

“United States Dollars” and “US$” means the lawful currency of the US; and

“Violation” has the meaning set forth in Section 4.4(1)(a).

1.2 Interpretation. For all purposes of this Agreement, except as otherwise expressly provided:

(i) the terms defined in this Section 1 shall have the meanings assigned to them in this Section 1 and include the plural as well as the singular;

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(ii) references to a Shareholder shall include references to his successors or permitted assignees;

(iii) all accounting terms not otherwise defined herein have the meanings assigned under US GAAP;

(iv) all references in this Agreement to designated “Sections” and other subdivisions are to the designated Sections and other subdivisions of the body of this Agreement;

(v) pronouns of either gender or neuter shall include, as appropriate, the other pronoun forms;

(vi) the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision; and

(vii) all references in this Agreement to designated Schedules, Exhibits and Annexes are to the Schedules, Exhibits and Annexes attached to this Agreement unless explicitly stated otherwise.

2. RIGHTS OF FIRST REFUSAL; CO-SALE RIGHTS AND OTHER TRANSFER RESTRICTIONS

2.1 Rights of First Refusal and Co-Sale Rights for Shareholders.

(1) Prohibition on Transfer of Shares by Shareholders. No Shareholder shall sell, assign, transfer, pledge, hypothecate, or otherwise encumber or dispose of in any way, all or any part of or any interest in the Shares now or hereafter owned or acquired by such Shareholder except: (i) in accordance with this Section 2.1, (ii) as required under a limited partnership agreement where all or any part of or any interest in the Shares is distributed to the limited partners of a partnership, (iii) to an Affiliate of a Holder, or (iv) to and among family members of a Holder and entities (including trusts, partnerships and limited liability companies) established for the benefit of an individual Holder or his or her family members, provided that, the transferee thereof shall agree in writing in form reasonably acceptable to the Company to be bound by the terms of this Agreement. Any sale, assignment, transfer, pledge, hypothecation or other encumbrance or disposition of Shares not made in conformity with this Agreement shall be null and void, shall not be recorded on the register of members of the Company and shall not be recognized by the Company.

(2) Right of First Refusal for other Shareholders.

(a) Transfer Notice from Transferor. If at any time prior to a Qualified Public Offering, a Shareholder (a “Transferor”) proposes to transfer any Shares to one or more third parties pursuant to an understanding with such third parties (a “Transfer”), then the Transferor shall give other Shareholders a written notice of the Transferor’s intention to make the Transfer (the “Transfer Notice”), which shall include a description of: (i) number of the Shares to be transferred (“Shares Offered by Transferor”); (ii) the identity of the prospective transferee; (iii) the consideration and the material terms and conditions upon which the proposed Transfer is to be made; and (iv) such other documents necessary to transfer legal and beneficial ownership of the said Shares. The Transfer Notice shall certify that the Transferor has received a firm offer from the prospective transferee and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer and a brief description of the Shareholder’s rights of first refusal and co-sale rights with respect to the proposed Transfer.

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(b) Other Shareholders’ Option.

(i) Each of the other Shareholders shall have an option for a period of fifteen (15) Business Days from its receipt of the Transfer Notice to elect (each Shareholder making such election, an “Electing Shareholder”), exercisable upon written notice to Transferor, to purchase up to that portion of the Shares Offered by Transferor equal to the fraction (A) the numerator of which is the number of Ordinary Shares directly or indirectly issued or issuable upon conversion of the Preferred Shares or upon conversion, exercise or exchange of any warrant, option, or other right of any kind convertible into or exercisable or exchangeable for Ordinary Shares owned by such Electing Shareholder at the time of the Transfer Notice and (B) the denominator of which is the total number of Ordinary Shares directly or indirectly issued or issuable upon conversion of the Preferred Shares or upon conversion, exercise or exchange of any warrant, option, or other right of any kind convertible into or exercisable or exchangeable for Ordinary Shares owned by all Electing Shareholders at the time of the Transfer Notice (the “Refusal Pro Rata Share”), at the same price and subject to the same material terms and conditions as described in the Transfer Notice.

(ii) In the event that not all of the Shareholders elect to purchase their pro rata portion of the Shares Offered by Transferor available pursuant to their rights under Section 2(b)(i) within the time period set forth therein, then Transferor shall promptly give written notice to each of the Electing Shareholders (the “Overallotment Notice”), which shall set forth the number of Shares Offered by Transferor not purchased by the other Shareholders, and shall offer such Electing Shareholders the right to acquire such unsubscribed shares. Each Electing Shareholders shall have five (5) Business Days after receipt of the Overallotment Notice to deliver a written notice to Transferor (the “Electing Shareholders Overallotment Notice”) indicating the number of unsubscribed shares that such Electing Shareholder desires to purchase, and each such Electing Shareholder shall be entitled to purchase such number of unsubscribed shares on the same terms and conditions as set forth in the Transfer Notice. In the event that the Electing Shareholders desire, in the aggregate, to purchase in excess of the total number of available unsubscribed shares, then the number of unsubscribed shares that each Electing Shareholder may purchase shall be reduced on a pro rata basis.

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(iii) Each Electing Shareholder shall be entitled to apportion Shares Offered by Transferor to be purchased among its partners and Affiliates, provided that such Electing Shareholder notifies the Transferor of such allocation.

(iv) Payment for the Shares purchased by the Electing Shareholders shall be by check or wire transfer, against delivery of the register of members recording the transferred Shares Offered by the Transferor to be purchased at a place agreed by the parties and at the time of the scheduled closing therefor, which shall be no later than forty-five (45) Business Days after receipt of the Transfer Notice or the Overallotment Notice, if applicable, unless the Transfer Notice contemplated a later closing with the prospective third party transferee or unless the value of the purchase price has not yet been established pursuant to Section 2.1(2)(c), and at such time, Transferor shall deliver to the Electing Shareholders the certificates representing the Shares Offered by Transferor to be purchased by the Electing Shareholders, each certificate to be properly endorsed for transfer.

(c) Valuation of Property.

(i) Should the purchase price specified in the Transfer Notice be payable in property other than cash or evidences of indebtedness, the Electing Shareholders shall have the right to pay the purchase price in the form of cash equal in amount to the fair market value of such property.

(ii) If the Transferor and the Electing Shareholders cannot agree on such cash value within ten (10) Business Days after the Shareholders’ receipt of the Transfer Notice, the valuation shall be made by an appraiser of recognized standing selected by the Transferor and a majority in interest of the Electing Shareholders or, if they cannot agree on an appraiser within twenty (20) Business Days after the Shareholders’ receipt of the Transfer Notice, each shall select an appraiser of recognized standing and the two appraisers shall designate a third appraiser of recognized standing, whose appraisal shall be determinative of such value. The cost of such appraisal shall be shared equally by Transferor and the Electing Shareholders, pro rata by each, based on the number of shares such parties have expressed an interest in purchasing pursuant to this Section 2.1.

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(iii) If the time for the Shareholder’s purchase has expired but for the determination of the value of the purchase price offered by the prospective transferee, such closing shall be held on or prior to the fifth Business Day after such valuation shall have been made pursuant to this sub-Section.

(3) Co-Sale Right for other Shareholders.

(a) To the extent the Shareholders do not exercise their rights of first refusal to all of the Shares Offered by Transferor pursuant to Section 2.1(2), the Shareholders who intend to participate in the sale of Shares (each, a “Selling Shareholder”) shall notify the Transferor in writing within twenty (20) Business Days after receipt of the Transfer Notice referred to in Section 2.1(2)(a), and shall have the right to participate in such sale of Shares on the same terms and conditions as specified in the Transfer Notice.

(i) The Selling Shareholder’s notice to the Transferor shall indicate the number and class or series of Shares the Selling Shareholder wishes to sell under its right to participate.

(ii) To the extent one or more of the Shareholders exercise such right of participation in accordance with the terms and conditions set forth below, the number of Shares that the Transferor may sell in the Transfer shall be correspondingly reduced.

(b) Such Selling Shareholder may elect to sell up to such number of Shares equal to (on a fully converted basis) the product of the aggregate number of Shares Offered by Transferor covered by the Transfer Notice and not purchased by the Electing Shareholders pursuant to Section 2.1(2) by a fraction, the numerator of which is the total number of (i) Ordinary Shares plus (ii) Ordinary Shares directly or indirectly issued or issuable upon conversion of the Preferred Shares or upon conversion, exercise or exchange of any warrant, option, or other right of any kind convertible into or exercisable or exchangeable for Ordinary Shares owned by the Selling Shareholder on the date of the Transfer Notice and the denominator of which is the total number of (i) Ordinary Shares plus (ii) Ordinary Shares directly or indirectly issued or issuable upon conversion of the Preferred Shares or upon conversion, exercise or exchange of any warrant, option, or other right of any kind convertible into or exercisable or exchangeable for Ordinary Shares owned by the Transferor (excluding shares purchased by the Electing Shareholders pursuant to Section 2.1(2)) and all of the Selling Shareholders on the date of the Transfer Notice.

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(c) Such Selling Shareholder shall effect its participation in the sale by promptly delivering to the Transferor for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer, which represent the type and number of Ordinary Shares or Ordinary Share Equivalents which the Selling Shareholder elects to sell, together with a share transfer form or such other documents necessary to enable the Transferor to be registered in the Company’s register of members as owners of the Shares to be sold; provided, however that if the prospective third-party purchaser objects to the delivery of Ordinary Share Equivalents in lieu of Ordinary Shares, the Company shall convert such Ordinary Share Equivalents into Ordinary Shares and deliver certificates corresponding to such Ordinary Shares. The Company agrees to make any such conversion concurrent with the actual transfer of the Shares to the prospective purchaser and contingent on such transfer.

(d) The share certificate or certificates and other documents that the Selling Shareholder delivers to the Transferors pursuant to Section 2.1(3)(c) shall be transferred to the prospective purchaser in consummation of the sale of the Shares pursuant to the terms and conditions specified in the Transfer Notice, and the Transferor shall concurrently therewith remit to the Selling Shareholder that portion of the sale proceeds to which the Selling Shareholder is entitled by reason of its participation in such sale.

(e) To the extent that any prospective purchaser prohibits the participation of the Selling Shareholder exercising its co-sale rights hereunder in a proposed Transfer or otherwise refuses to purchase Shares or other securities from the Selling Shareholder exercising its co-sale rights hereunder, the Transferor shall not sell to such prospective purchaser any Shares unless and until, simultaneously with such sale, the Transferor shall purchase the Shares or other securities from the Selling Shareholder for the same consideration and on the same terms and conditions as the proposed transfer described in the Transfer Notice.

(f) The exercise or non-exercise of the rights of any Shareholder hereunder to participate in one or more Transfers of Shares made by any Transferor shall not adversely affect its or his right to participate in subsequent Transfers of Shares subject to Section 2.

(g) To the extent that the Shareholders do not elect to participate in the sale of the Shares Offered by Transferor, such Transferor may, not later than forty-five (45) Business Days following delivery of the Transfer Notice, enter into an agreement providing for the closing of the Transfer of such Shares within thirty (30) days of such agreement on terms and conditions not more favorable to the transferor than those described in the Transfer Notice. Any proposed Transfer on terms and conditions more favorable than those described in the Transfer Notice, as well as any subsequent proposed Transfer of any Shares by a Shareholder, shall again be subject to the first refusal and co-sale rights of the Shareholders and shall require compliance by a proposed Transferor with the procedures described in this Section 2. In the event such Transferor does not consummate the Transfer of such Shares within the thirty (30) day period from the expiration of these rights, the Shareholders’ right of first refusal and co-sale rights shall continue to be applicable to any subsequent Transfer of Shares by a Transferor until such right lapses in accordance with the terms of this Agreement.

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(4) Limitations to Rights of First Refusal and Co-Sale.

Notwithstanding the foregoing or anything to the contrary herein, the above provisions of this Section 2.1 shall not apply:

(i) in the case of a Transferor that is an entity, upon a transfer of Shares (A) by such Transferor to its Affiliates, stockholders, members, former members, partners, former partners or other equity holders, (B) by such Transferor that is a venture capital firm to an affiliated venture capital firm, (C) by such Transferor that is a mutual fund to another mutual fund, pursuant to an agreement and plan of merger and/ or reorganization, (D) by a Morgan Stanley Holder to another Morgan Stanley Holder, or (E) by such Transferor that is an individual or entity advised by an investment advisor transferring to an entity advised by the same investment advisor, provided, however, that, in each case, notwithstanding any such permitted transfer, such transferred Shares shall remain Shares for all purposes hereunder, and such transferee shall be treated as a Shareholder (but only with respect to the securities so transferred to the transferee) for all purposes of this Agreement (including the obligations of a Shareholder with respect to the Transfer pursuant to this Section 2.1);

(ii) in the case of a Transferor that is a natural person, upon a transfer of the Transferor Shares by such Transferor, upon his or her death by will or intestacy to his or her siblings, children, grandchildren, spouse or any other relatives approved by unanimous consent of the Board of Directors of the Company, or any custodian or trustee for the account of a Transferor or a Transferor’s siblings, children, grandchildren or spouse;

(iii) to a repurchase of Ordinary Shares from an Ordinary Shareholder by the Company under the repurchase rights granted to the Company with respect to such Ordinary Shareholder as of or after the date of this Agreement, if any, at a price no greater than that originally paid by such Ordinary Shareholder for such Ordinary Shares; or

(iv) to any sale to the public pursuant to a Qualified Public Offering;

PROVIDED THAT, in the case of any Transfer pursuant to Section 2.1(4)(i) or (ii), the transferee thereof shall agree in writing in form reasonably acceptable to the Company to be bound by the terms of this Agreement.

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(5) Terms of the Lock-up Agreement Prevail.

Notwithstanding anything to the contrary in this Agreement, any transfer of Shares permitted under this Section 2.1 (including Section 2.1(4)) shall only be permitted if such transfer is allowed pursuant to any agreement entered into between such Transferor and the managing underwriter pursuant to Section 4.5(3).

(6) Termination of the Rights of First Refusal and Co-Sale.

The rights of first refusal and of co-sale provided under this Section 2.1 shall be terminated upon the closing of a Qualified Public Offering.

3. DRAG ALONG RIGHTS

3.1 Drag Along Rights.

In the event that the holders of (i) more than seventy-five percent (75%) of the votes attributable to the then outstanding Preferred Shares (on a fully-converted basis) and (ii) a majority of the votes attributable to the then outstanding Ordinary Shares, each voting as a separate class (the “Proposing Shareholders”), approve a Sale Transaction in which (A) the proceeds to the holders of the Series C Preferred Shares would be equal to three hundred percent (300%) of the Original Issue Price of the Series C Preferred Shares (either as consideration for their Shares or through the operation of the New M&AA), (B) the proceeds to the holders of the Series D Preferred Shares would be equal to three hundred percent (300%) of the Original Issue Price of the Series D Preferred Shares (either as consideration for their Shares or through the operation of the New M&AA), (C) the proceeds to the holders of the Series E Preferred Shares would be equal to three hundred percent (300%) of the Original Issue Price of the Series E Preferred Shares (either as consideration for their Shares or through the operation of the New M&AA) and (D) the proceeds to the holders of the Series F Preferred Shares would be equal to three hundred percent (300%) of the Original Issue Price of the Series F Preferred Shares (either as consideration for their Shares or through the operation of the New M&AA), the remaining Shareholders shall be required, if so demanded by the Proposing Shareholders in writing at least twenty (20) days prior to the consummation of the proposed transaction(s) (a “Sale Transaction Notice”), (a) in the event such transaction is to be brought to a vote at a shareholder meeting, to vote on the approval of the Sale Transaction, to be present, in person or by proxy, as a holder of Shares at all such meetings and to be counted for the purposes of determining the presence of a quorum at such meetings, and at every adjournment thereof, (b) to vote (in person, by proxy or by action by written consent, as applicable) all Shares as to which it has beneficial ownership in favor of such Sale Transaction and in opposition of any and all other proposals that could reasonably be expected to delay or impair the ability of the Company and/or the Proposing Shareholders to consummate such Sale Transaction, (c) to waive and refrain from exercising any dissenter’s rights or rights of appraisal under applicable law at any time with respect to such Sale Transaction, if applicable, (d) to execute and deliver all related documentation and take such other action in support of the Sale Transaction as shall reasonably be requested by the Proposing Shareholders, including without limitation executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, indemnity agreement, escrow agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible liens, claims and encumbrances) and any similar or related documents, and (e) if so demanded by the Proposing Shareholders, to sell all of their Shares to the proposed buyer on the terms and conditions as set out in the Sale Transaction Notice, and at the price as set out in the Sale Transaction Notice. The Sale Transaction Notice shall include: (i) a description of the Sale Transaction; (ii) the identity of the prospective participating parties (other than the Proposing Shareholders of the Company) involved in the Sale Transaction; and (iii) the consideration and the material terms and conditions upon which such Sale Transaction is to be made, including price. The Sale Transaction Notice shall certify that the Proposing Shareholders have received a firm offer from the prospective participating parties and in good faith believe a binding agreement for the Sale Transaction is obtainable on the terms set forth in the Sale Transaction Notice. The Sale Transaction Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Sale Transaction. Except for this Agreement, neither the Parties hereto nor any Affiliates thereof shall deposit any Shares beneficially owned by such Party or Affiliate in a voting trust or subject any such Shares to any arrangement or agreement with respect to the voting of such Shares.

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3.2 Termination of the Drag Along Rights.

The right of drag along provided under Section 3.1 shall be terminated upon the closing of a Qualified Public Offering.

4 REGISTRATION RIGHTS

4.1 Demand Registration.

(1) Demand Registration Other Than on Form F-3 (or Its Non-US Equivalent). Subject to the terms of this Agreement, at any time after a Qualified Public Offering, any Holder of Registrable Securities may request the Company in writing to effect the Registration of Registrable Securities. Upon receipt of such a request, the Company shall (a) promptly give written notice of the proposed Registration to all other Holders of Registrable Securities; and (b) as soon as practicable, and in any event within sixty (60) Business Days of the receipt of such request, cause Registrable Securities specified in the request, together with any Registrable Securities of any Holder who requests in writing to join such Registration within fifteen (15) Business Days after the Company’s delivery of written notice, to be Registered and/or qualified for sale and distribution in such jurisdictions as the Initiating Holder may reasonably request.

The Company shall not be obligated to effect more than two (2) Registrations in total for Holders of Registrable Securities pursuant to this Section 4.1(1).

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(2) Demand Registration on Form F-3. Subject to the terms of this Agreement, at any time after a Qualified Public Offering, any Holder of Registrable Securities may request the Company in writing to file a Registration Statement on Form F-3 (or any successor form to Form F-3, or any comparable form for Registration in a jurisdiction other than the United States) for a public offering of Registrable Securities for which the reasonably anticipated aggregate price to the public, would exceed US$5,000,000 (or, in the case of Registrable Securities proposed to be sold by a Holder or former Holder of Series C Preferred Shares, Series D Preferred Shares, Series E Preferred Shares or Series F Preferred Shares, US$1,000,000), and the Company is entitled to use Form F-3 or a comparable form to Register the requested Registrable Securities (provided that if such form is not available due to any action or inaction by the Company, such registration shall be on form F-1, or a comparable form, notwithstanding the limits in Section 4.1(1)). Upon receipt of such a request the Company shall (i) promptly give written notice of the proposed Registration to all other Holders of Registrable Securities and (ii) as soon as practicable, and in any event within sixty (60) Business Days of the receipt of such request, cause the Registrable Securities specified in the request, together with any Registrable Securities of any Holder who requests in writing to join such Registration within fifteen (15) Business Days after the Company’s delivery of written notice, to be Registered and qualified for sale and distribution in such jurisdictions as the Initiating Holder may reasonably request. A Holder may at any time, and from time to time, require the Company to effect the Registration of Registrable Securities under this Section 4.1(2).

The Company shall be obligated to effect unlimited Form F-3 registrations pursuant to this Section 4.1(2) provided that the Company shall not be required to effect more than two (2) Registrations in total for Holders of Registrable Securities pursuant to this Section 4.1(2) in any twelve (12) month period.

(3) Right of Deferral. (a) The Company shall not be obligated to Register or qualify Registrable Securities pursuant to this Section 4.1.3:

(i) in any jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such Registration or qualification, unless the Company is already subject to service of process in such jurisdiction;

(ii) if, within ten (10) Business Days of the receipt of any request of the Holder to Register any Registrable Securities under Section 4.1(1) or Section 4.1(2), the Company gives notice to the Initiating Holder of its bona fide intention to effect the filing for its own account of a Registration Statement with the Commission in connection with a Qualified Public Offering within sixty (60) Business Days of receipt of that request (other than a registration of securities in a transaction under Rule 145 of the Securities Act or an offering solely to employees), provided that such Registration Statement is filed within ninety (90) days of receipt of such request and the Company is actively employing in good faith all reasonable efforts to cause that Registration Statement to become effective; or

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(iii) within six (6) months immediately following the effective date of any Registration Statement in connection with a Qualified Public Offering (other than a registration of securities in a transaction under Rule 145 of the Securities Act or with respect to an employee benefit plan), provided that the Initiating Holders were permitted to register such shares as requested to be registered pursuant to Section 4.2 hereof without reduction by the underwriter thereof.

(b) If, after receiving a request from Holder pursuant to Section 4.1(1) or Section 4.1(2), the Company furnishes to the Holder a certificate signed by the Chief Executive Officer of the Company stating that, in the good faith judgment of the Board of Directors of the Company, such deferral is necessary to avoid premature disclosure of a financing, acquisition, recapitalization, reorganization or other material transaction, the disclosure of which would have a materially detrimental effect on the Company, the Company’s obligation to file a Registration Statement shall be deferred for a period not to exceed ninety (90) Business Days from the receipt of any request duly submitted by Holder under Sections 4.1(1) or 4.1(2) to Register Registrable Securities; provided that the Company shall not exercise the right contained in this Sections 4.1(3)(b) more than once in any twelve (12) month period; and provided further that the Company shall not register any securities for the account of itself or any other shareholder during such ninety (90) Business Day period (other than a registration of securities in a transaction under Rule 145 of the Securities Act or with respect to an employee benefit plan).

(4) Underwritten Offerings. If, in connection with a request to Register Registrable Securities under Section 4.1(1) or Section 4.1(2), the Initiating Holder seeks to distribute such Registrable Securities in an underwriting, it shall so advise the Company as a part of the request, and the Company shall include such information in the written notice to the other Shareholders described in Sections 4.1(1) and 4.1(2). In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Holders of a majority of the Registrable Securities held by all Initiating Holders. Notwithstanding any other provision of this Agreement, if the managing underwriter advises the Company that marketing factors (including the aggregate number of securities requested to be Registered, the general condition of the market, and the status of the Persons proposing to sell securities pursuant to the Registration) require a limitation of the number of Equity Securities to be underwritten, then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the underwriters may exclude some of the Registrable Securities from the underwriting if so justified after excluding any other Equity Securities from the underwriting; provided, however, that all Holders of Registrable Securities shall share pro rata in the number of Equity Securities to be excluded from such registration pursuant to this Section 4.1(4). In no event shall any Registrable Securities be excluded from such underwriting and registration unless all other securities of the Company are first excluded.

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4.2 Piggyback Registrations.

(1) Registration of the Company’s Securities. Subject to Section 4.2(3), if the Company proposes to Register for its own account any of its Equity Securities in connection with the public offering of such securities, the Company shall promptly give all Holders of Registrable Securities written notice of such Registration and, upon the written request of any Holder given within twenty (20) Business Days after delivery of such notice, the Company shall use commercially reasonable efforts to include in such Registration any Registrable Securities thereby requested by such Holder. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to subsequent offerings of its securities, all upon the terms and conditions set forth herein.

(2) Right to Terminate Registration. The Company shall have the right to terminate or withdraw any Registration initiated by it under Section 4.2(1) prior to the effectiveness of such Registration, whether or not any Holder has elected to participate therein and shall promptly notify any Holder that has elected to include shares in such registration of such termination or withdrawal. The expenses of such withdrawn Registration shall be borne by the Company in accordance with Section 4.3(3).

(3) Underwriting Requirements.

(a) If the Registration Statement of which the Company gives notice under Section 4.2(1) is for an underwritten offering, the Company shall so advise the Holders of Registrable Securities. In connection with any offering involving an underwriting of the Company’s Equity Securities, the Company shall not be required to Register the Registrable Securities of a Holder under this Section 4.2 unless such Holder’s Registrable Securities are included in the underwriting and such Holder enters into an underwriting agreement in customary form with the underwriters selected by the Company and setting forth such terms for the underwriting as have been agreed upon between the Company and the underwriters; provided, however, that the liability of each such Holder in respect of any indemnification, contribution or other obligation of such Holder arising under such underwriting agreement (i) shall be limited to losses arising out of or based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement, incorporated document or other such disclosure document or other document or report, in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Holder expressly for inclusion therein and (ii) shall not in any event exceed an amount equal to the net proceeds to such Holder (after deduction of all underwriters’ discounts and commissions) from the disposition of the Registrable Securities disposed of by such Holder pursuant to such Registration. In the event the underwriters advise the Holder seeking Registration of Registrable Securities pursuant to this Section 4.2 in writing that market factors (including the aggregate number of Registrable Securities requested to be Registered, the general condition of the market, and the status of the persons proposing to sell securities pursuant to the Registration) require a limitation of the number of Equity Securities to be underwritten, the underwriters may exclude some or all Registrable Securities from the Registration and underwriting if so justified after excluding any other Equity Securities (except for securities to be offered by the Company) from the Registration and underwriting; provided, however, that no such reduction shall reduce the amount of securities of the selling Holders included in the registration below twenty-five percent (25%) of the total amount of securities included in such registration; provided, further, however, Registrable Securities held by officers and directors of the Company must be excluded prior to the exclusion of Registrable Securities held by the other Preferred Shareholders, unless such offering is the Company’s initial firm commitment underwritten public offering of its Equity Securities Registered under the Securities Act and such Registration does not include shares of any other selling shareholders, in which event any or all of the Registrable Securities of the Holders may be excluded in accordance with the immediately preceding clause.

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(b) If any Holder disapproves of the terms of any underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriters delivered at least seven (7) Business Days prior to the effective date of the Registration Statement. Any Registrable Securities excluded or withdrawn from the underwriting shall be withdrawn from the Registration.

(4) Exempt Transactions. The Company shall have no obligation to Register any Registrable Securities under this Section 4.2 in connection with a Registration by the Company (i) relating solely to the sale of securities to participants in a Company stock plan, (ii) relating to a corporate reorganization or other transaction under Rule 145 of the Securities Act (or comparable provision under the laws of another jurisdiction, as applicable), or (iii) on any form that does not include substantially the same information as would be required to be included in a Registration Statement covering the sale of the Registrable Securities.

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(5) Unlimited Times of Registration Requests. The Company shall be obligated to effect unlimited registrations pursuant to this Section 4.2.

4.3 Procedures.

(1) Registration Procedures and Obligations. Whenever required under this Agreement to effect the Registration of any Registrable Securities held by the Holder, the Company shall, as expeditiously as possible:

(a) Prepare and file with the Commission a Registration Statement with respect to those Registrable Securities and use its commercially reasonable best efforts to cause that Registration Statement to become effective, and, upon the request of the Holder holding a majority of the Registrable Securities Registered thereunder, keep the Registration Statement effective for up to one hundred and twenty (120) Business Days; provided that before filing a Registration Statement or any amendments or supplements thereto, the Company will furnish to the counsel for the selling Holders hereof copies of all such documents proposed to be filed;

(b) Prepare and file with the Commission amendments and supplements to that Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to comply with the provisions of Applicable Securities Law with respect to the disposition of all securities covered by the Registration Statement;

(c) Furnish to the Holder the number of copies of a prospectus, including a preliminary prospectus, required by Applicable Securities Law, and any other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;

(d) Use its commercially reasonable best efforts to Register and qualify the securities covered by the Registration Statement under the securities laws of any jurisdiction, as reasonably requested by the Holder, and do any and all other acts and things that may be reasonably necessary or advisable to enable such Holder to consummate the disposition in such jurisdictions of the Registrable Securities owned by such Holder, provided that the Company shall not be required to qualify to do business or file a general consent to service of process in any such jurisdictions, and provided further that in the event any jurisdiction in which the securities shall be qualified imposes a non-waivable requirement that expenses incurred in connection with the qualification of the securities be borne by Selling Shareholders, those expenses shall be payable pro rata by Selling Shareholders;

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(e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of the offering. Each shareholder participating in the underwriting shall also enter into and perform its obligations under such an agreement;

(f) Notify the Holder of Registrable Securities covered by the Registration Statement at any time when a prospectus relating thereto is required to be delivered under Applicable Securities Law or of the happening of any event as a result of which any prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. The Company will use its commercially reasonable best efforts to amend or supplement such prospectus in order to cause such prospectus not to include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

(g) In the event of the issuance of any stop order suspending the effectiveness of a Registration Statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any shares included in such Registration Statement for sale in any jurisdiction, the Company will use its commercially reasonable best efforts promptly to obtain the withdrawal of such order and the period during which the Company shall be required to keep such Registration Statement effective as provided in Section 4.3(1)(a) hereof shall be extended by the number of days the prospectus was not available to effect such resale;

(h) Provide a transfer agent and registrar for all Registrable Securities Registered pursuant to the Registration Statement and, where applicable, a CUSIP number for all those Registrable Securities, in each case not later than the effective date of the Registration;

(i) Furnish, at the request of any Holder requesting Registration of Registrable Securities pursuant to this Agreement, on the date that such Registrable Securities are delivered for sale in connection with a Registration pursuant to this Agreement, (i) an opinion, dated the date of the sale, of the counsel representing the Company for the purposes of the Registration, in form and substance as is customarily given to underwriters in an underwritten public offering; and (ii) a comfort letter dated the date of the sale, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters;

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(j) Take all reasonable action necessary to list the Registrable Securities on the primary exchange upon which the Company’s securities are then traded;

(k) Permit any Holder of Registrable Securities which Holder, in its reasonable judgment, might be deemed to be an underwriter or a controlling person of the Company, to participate in the preparation of such Registration Statement and to require the insertion therein of material, furnished to the Company in writing, which in the reasonable judgment of such Holder and its counsel should be included, including without limitation the insertion therein of language, in form and substance satisfactory to such Holder and the Company, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the Company’s securities covered thereby and that such holding does not imply that such holder will assist in meeting any future financial requirements of the Company; and

(l) Make available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other agent retained by any such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors, employees and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such Registration Statement; provided, however, that each person provided with such information shall agree in writing to hold it in strict confidence and shall not make any disclosure or use any record or other information unless (a) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the Securities Act, (b) the release of such information is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information has been made generally available to the public other than by disclosure in violation of this or any other agreement of which such person has knowledge of the terms. Each Shareholder agrees that it shall, upon learning that disclosure of such information is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the information deemed confidential.

(2) Information From Holder. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the Registration of such Holder’s Registrable Securities.

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(3) Expenses of Registration. All expenses, other than Selling Expenses, incurred in connection with Registrations, filings or qualifications pursuant to this Agreement, including (without limitation) all Registration, filing and qualification fees, printers’ and accounting fees, escrow fees, fees and disbursements of counsel for the Company and underwriters, reasonable fees and disbursements not exceeding $25,000 of a single special counsel for the Holders, blue sky fees and expenses and the expense of any special audits incident to or required by any such registration but excluding any underwriting discounts and commissions, shall be borne by the Company. The Company shall not, however, be required to pay for any expenses of any Registration proceeding begun pursuant to this Agreement if the Registration request is subsequently withdrawn at the request of Holder representing a majority in voting power of the Registrable Securities to be Registered (in which case the Holder shall bear such expenses) unless either (i) such withdrawal is after any deferral or delay by the Company in effecting such registration, (ii) such withdrawal follows such Holders becoming aware of any material event with respect to the Company or (iii) such Holders agree to count such registration as a registration pursuant to Section 4.1(1) or (2), as applicable. If the Holders are required to pay any expenses in connection with Registrations, such expenses shall be borne by the holders of securities (including Registrable Securities) requesting such Registration in proportion to the number of shares for which Registration was requested.

(4) Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any Registration as the result of any controversy that may arise with respect to the interpretation or implementation of this Agreement.

4.4 Indemnification under Registration Rights.

(1) Company Indemnity.

(a) To the extent permitted by law, the Company will indemnify and hold harmless the Holder, such Holder’s officers, directors, partners, members, shareholders, legal counsel and accountants, any underwriter (as defined in the Securities Act) for such Holder and each Person, if any, who controls or is alleged to control (as defined in the Securities Act) such Holder or underwriter against any losses, claims, damages or liabilities (joint or several) to which they may become subject under laws which are applicable to the Company and relate to action or inaction required of the Company in connection with any Registration, qualification, or compliance, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (each a “Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained in such Registration Statement or incorporated by reference therein, including any preliminary prospectus or final prospectus contained therein, any issuer free writing prospectus related thereto, or any amendments or supplements thereto, (ii) the omission or alleged omission to state in the Registration Statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of Applicable Securities Laws, or any rule or regulation promulgated under Applicable Securities Laws. The Company will reimburse each such Holder, underwriter or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred.

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(b) The indemnity agreement contained in this Section 4.4(1) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld, delayed or conditioned), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation that occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such Registration by any such Holder or controlling person regarding such Holder or its intended method of distribution.

(2) Holder Indemnity.

(a) To the extent permitted by law, each selling Holder will, severally and not jointly, if Registrable Securities held by such Holder are included in the securities as to which such registration qualifications or compliance is being effected, indemnify and hold harmless the Company, its directors, officers, legal counsel and accountants, any underwriter, any other Holder selling securities in connection with such Registration and each Person, if any, who controls (within the meaning of the Securities Act) the Company, such underwriter or other Holder, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing persons may become subject, under Applicable Securities Laws, or any rule or regulation promulgated under Applicable Securities Laws, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information regarding such Holder or such Holder’s intended method of distribution and furnished by such Holder expressly for use in connection with such Registration; and each such Holder will reimburse any person intended to be indemnified pursuant to this Section 4.4(2), for any legal or other expenses reasonably incurred by such person in connection with investigating or defending any such loss, claim, damage, liability or action if it is judicially determined that there was such a Violation.

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(b) The indemnity contained in this Section 4.4(2) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld, delayed or conditioned), and in no event shall any indemnity under this Section 4.4(2) together with any obligation under Section 4.4(4) exceed the net proceeds from the offering received by such Holder.

(3) Notice of Indemnification Claim. Promptly after receipt by an indemnified party under Section 4.4(1) or Section 4.4(2) of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under Section 4.4(1) or Section 4.4(2), deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the indemnifying parties. An indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 4.4, but the omission to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 4.4.

(4) Contribution. If any indemnification provided for in Section 4.4(1) or Section 4.4(2) is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and of the indemnified party, on the other, in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations, provided that no contribution by any Holder, when combined with any amounts paid by such Holder pursuant to Section 4.4(2), shall exceed the net proceeds from the offering received by such Holder. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

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(5) Survival. The obligations of the Company and the Holders under this Section 4.4 shall survive the completion of any offering of Registrable Securities in a Registration Statement under this Agreement, and otherwise. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

4.5 Additional Undertakings.

(1) Reports Under the Exchange Act. With a view to making available to the Holder the benefits of Rule 144 promulgated under the Securities Act and any comparable provision of any Applicable Securities Law that may at any time permit an Holder to sell securities of the Company to the public without Registration or pursuant to a Registration on Form F-3 (or any comparable form in a jurisdiction other than the United States), the Company agrees to:

(a) make and keep public information available, as those terms are understood and defined in Rule 144 (or comparable provision under Applicable Securities Laws in any jurisdiction where the Company’s securities are listed), at all times after the effective date of a Qualified Public Offering;

(b) file with the Commission in a timely manner all reports and other documents required of the Company under all Applicable Securities Laws; and

(c) at any time following ninety (90) days after the effective date of the Qualified Public Offering, promptly furnish to any Holder holding Registrable Securities, upon request (i) a written statement by the Company that it has complied with the reporting requirements of all Applicable Securities Laws at any time after it has become subject to such reporting requirements or, at any time after so qualified, that it qualifies as a registrant whose securities may be resold pursuant to Form F-3 (or any form comparable thereto under Applicable Securities Laws of any jurisdiction where the Company’s securities are listed), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents as may be filed by the Company with the Commission, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the Commission, that permits the selling of any such securities without Registration or pursuant to such form.

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(2) Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of ninety percent (90%) of the Registrable Securities, enter into any agreement with any holder or prospective holder of any Equity Securities of the Company that would allow such holder or prospective holder (a) to include such securities in any Registration filed under Section 4.2, unless under the terms of such agreement such holder or prospective holder may include such Equity Securities in any such Registration only to the extent that the inclusion of such securities will not reduce the amount of the Registrable Securities of the Holder that are included, (b) to demand Registration of their securities, or (c) to enjoy registration rights otherwise superior to or in parity with the Holder.

(3) “Market Stand-Off” Agreement. Provided that all executive officers, directors, and other one percent (1%) shareholders of the Company are similarly bound, each Holder agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the Company’s initial public offering and ending on the date specified by the Company and the managing underwriter (such period not to be modified or to exceed one hundred and eighty (180) days in order solely to restrict or benefit the Holders) (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Equity Securities (whether then owned or thereafter acquired) or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Equity Securities, whether any such transaction described in Section (i) or (ii) above is to be settled by delivery of Equity Securities or such other securities, in cash or otherwise, in each case except for Equity Securities included in such initial public offering or acquired in such initial public offering or in the open market after such initial public offering. Each Holder agrees to sign an agreement containing customary terms and conditions with the managing underwriter reflecting this Section 4.5(3). In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Securities of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period.

(4) Termination of Registration Rights. Notwithstanding anything to the contrary in this Agreement:

(i) No Holder shall be entitled to exercise any right provided for in this Section 4 at such time as (i) such Holder owns less than one percent (1%) of the outstanding Ordinary Shares (on an as-converted and fully-diluted basis), and (ii) such Holder is able to sell all his, her or its Registrable Securities in a single sale under Rule 144 (or any successor thereto) under the Securities Act (or any comparable non-US exchange rule or regulation); and

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(ii) if (a) the Company obtains from the Commission a “no-action” letter in which the Commission indicated that it will take no action if, without Registration under the Securities Act or other Applicable Securities Laws, any Holder disposes of Registrable Securities covered by any request for Registration made under this Agreement in the specific manner in which the Holder proposes to dispose of Registrable Securities included in that request (including, without limitation, inclusion of the Registrable Securities in an underwriting initiated by either the Company or the Holder) and that the Registrable Securities may be sold to the public without Registration or (b) in the opinion of counsel for the Company subject to concurrence by counsel for the Holder, which concurrence shall not be unreasonably withheld, no Registration under the Securities Act (or other Applicable Securities Law) is required in connection with the disposition and that the Registrable Securities may be sold to the public without Registration, then the Registrable Securities included in the request for Registration, shall not be eligible for Registration under Section 4.1 with respect to the proposed disposition. Any Registrable Securities not so disposed of shall be eligible for Registration in accordance with the terms of this Agreement with respect to other proposed dispositions to which this Section 4.5(4) does not apply.

(5) Assignment of Registration Rights. The right to cause the Company to Register Registrable Securities pursuant to this Agreement and other rights set forth in this Section 4 (including without the right to indemnification under Section 4.4) may be assigned by a Holder to a transferee or assignee of such securities that (i) is an Affiliate of a Holder, (ii) is an entity advised by the same investment advisor that advises the Holder, (iii) is a member of a Holder’s family or a trust for the benefit of an individual Holder or family member thereof, or (iv) after such assignment or transfer, holds Registrable Securities representing at least 100,000 Ordinary Shares on an as-converted basis (subject to appropriate adjustment for stock splits, stock dividends, combinations and other recapitalizations), provided that: (a) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; (b) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement; and (c) such transfer or assignment shall be effective only if immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under Applicable Securities Law. In the event of a transfer or assignment of Registrable Securities which does not satisfy the conditions set forth above, such securities shall no longer be deemed to constitute “Registrable Securities” for purposes of this Agreement.

(6) Aggregation of Morgan Stanley Holders and T. Rowe Price Holders. For the purposes of Section 4.1(2), 4.5(3) and 4.5(4)(i), the number of Ordinary Shares (a) held by any Morgan Stanley Holder shall be determined by aggregating all Ordinary Shares held by the Morgan Stanley Holders and (b) held by any T. Rowe Price Holder shall be determined by aggregating all Ordinary Shares held by the T. Rowe Price Holders, provided that in either case, the Ordinary Shares held by any such Holder shall not be counted more than once.

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(7) Exercise of Preferred Shares. Notwithstanding anything to the contrary provided in this Agreement, the Company shall have no obligation to Register Registrable Securities which, if constituting Ordinary Share Equivalents, have not been exercised, converted or exchanged, as applicable, for Ordinary Shares.

5. PRE-EMPTIVE RIGHT

5.1 Pre-emptive Right.

(1) General. The Company hereby grants to each Holder a right of first offer to purchase up to a pro rata share of the entirety of any New Securities which the Company may, from time to time, propose to sell and issue after the date of this Agreement. A Holder’s “pro rata share”, for purposes of this pre-emptive right shall be determined according to the number of Ordinary Shares owned by such Holder immediately prior to the issuance of the New Securities (assuming the exercise, conversion or exchange of any Ordinary Share Equivalents) in relation to the total number of Ordinary Shares outstanding immediately prior to the issuance of the New Securities (assuming the exercise, conversion or exchange of any Ordinary Share Equivalents). If a Holder does not fully subscribe for the number or amount of New Securities that it is entitled to purchase pursuant to this Section 5.1(1), then the other Holders which elect to purchase New Securities shall have the right of first offer to purchase the remaining of the aforesaid number or amount of New Securities not so subscribed for within ten (10) Business Days from the date when such non-purchasing Holder fails to exercise its right hereunder. For the purposes of this Section 5.1(1), (a) the “pro rata share” held by a Morgan Stanley Holder shall be determined in aggregate and not individually, by aggregating all Ordinary Shares (assuming the exercise, conversion or exchange of any Ordinary Share Equivalents) owned by all Morgan Stanley Holders, and Morgan Stanley may allocate the rights pursuant to this Section 5.1 among the Morgan Stanley Holders at the discretion of Morgan Stanley and (b) the “pro rata share” held by a T. Rowe Price Holder shall be determined in aggregate and not individually, by aggregating all Ordinary Shares (assuming the exercise, conversion or exchange of any Ordinary Share Equivalents) owned by all T. Rowe Price Holders, and T. Rowe Price may allocate the rights pursuant to this Section 5.1 among the T. Rowe Price Holders at the discretion of T. Rowe Price.

(2) Issuance Notice. In the event the Company proposes to undertake an issuance of New Securities, it shall give the Holders written notice (an “Issuance Notice”) of such intention, describing the type of New Securities, and the price and the general terms upon which the Company proposes to issue the same and offering to sell such New Securities to the Holders as described in Section 5.1(1). The Holders shall have fifteen (15) Business Days after any Issuance Notice is mailed or delivered to agree to purchase the amount of such New Securities as set forth in Section 5.1(1) for the price and upon the terms specified in the Issuance Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased.

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(3) Sales by the Company. Upon the expiration of fifteen (15) Business Days from the Company’s delivery of the Issuance Notice and for thirty (30) Business Days thereafter, the Company may sell any New Securities with respect to which any Holder’s right of first offer under this Section 5.1 was not exercised, at a price and upon terms no more favorable to the purchasers thereof than specified in the Issuance Notice. In the event the Company has not sold such New Securities within such 45-Business Day period, the Company shall not thereafter issue or sell any New Securities, without first again offering such securities to the Holders in the manner provided in Section 5.1(1) above.

(4) Assignments and Transfers. The rights and obligations of the Parties under this Section 5 shall inure to the benefit of, and be binding upon, their respective successors, assigns and legal representatives, but shall not otherwise be for the benefit of any third party. The rights of the Holders hereunder are only assignable (i) to a partner or Affiliate of such Holder, (ii) to an entity advised by the same investment advisor that advises the Holder, or (iii) to an assignee or transferee who acquires any of the Equity Securities held by the Holders.

(5) Legend. Each existing or replacement certificate for Shares now owned or hereafter acquired by the Ordinary Shareholder shall, to the extent applicable, bear the following legend upon its face:

“THE SALE, PLEDGE, HYPOTHECATION, ASSIGNMENT OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF RIGHT OF FIRST REFUSAL, CO-SALE AGREEMENT AND/OR OTHER TRANSFER RESTRICTIONS, AS APPLICABLE, BY AND BETWEEN THE SHAREHOLDER, THE COMPANY AND CERTAIN HOLDERS OF SHARES OF THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.”

The Company shall be obligated to reissue promptly unlegended certificates at the request of any Holder thereof if the Company has completed a Qualified Public Offering and the Holder of such certificate is no longer subject to any restrictions hereunder.

(6) The pre-emptive right provided under this Section 5.1 shall be terminated upon the closing of a Qualified Public Offering.

6. INFORMATION RIGHTS

6.1 The Holders shall have the information rights as provided in the New M&AA.

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7. CONVERSION RIGHTS

7.1 Each Preferred Share shall be capable of conversion into one or more Ordinary Shares as provided in the New M&AA.

8. DIVIDEND RIGHTS

8.1 The Shareholders shall have the dividend rights as provided in the New M&AA.

9. LIQUIDATION RIGHTS

9.1 The Shareholders shall have the liquidation rights and preferences as provided in the New M&AA.

10. BOARD; VOTING RIGHTS

10.1 Board.

10.1.1 Number and Composition. The Shareholders agree (on behalf of themselves and any transferee or assignee) to vote or cause to be voted all Ordinary Shares, Preferred Shares and any other shares of voting securities of the Company now owned or hereafter acquired or controlled by them, attend all meetings whether in person or by proxy (or shall consent pursuant to an action by written consent), and otherwise to use their respective best efforts as Shareholders and Directors, to cause and maintain the size of the Board to be seven (7) and to elect:

(a) one (1) individual nominated by Brookside to serve on the Board. No member of the Board nominated pursuant to this Section 10.1.1(a) may be removed unless Brookside elects to remove such Director. Any vacancy on the Board created by the resignation, removal, incapacity or death of any Director elected pursuant to this Section 10.1.1(a) shall only be filled by another individual nominated by Brookside.

(b) one (1) individual nominated by Maverick or its investment advisor to serve on the Board. No member of the Board nominated pursuant to this Section 10.1.1(b) may be removed unless Maverick elects to remove such Director. Any vacancy on the Board created by the resignation, removal, incapacity or death of any Director elected pursuant to this Section 10.1.1(b) shall only be filled by another individual nominated by Maverick.

(c) one (1) individual nominated by Chengwei Ventures to serve on the Board. No member of the Board nominated pursuant to this Section 10.1.1(c) may be removed unless Chengwei Ventures elects to remove such Director. Any vacancy on the Board created by the resignation, removal, incapacity or death of any Director elected pursuant to this Section 10.1.1(c) shall only be filled by another individual nominated by Chengwei Ventures.

(d) one (1) individual nominated by Sutter Hill to serve on the Board. No member of the Board nominated pursuant to this Section 10.1.1(d) may be removed unless Sutter Hill elects to remove such Director. Any vacancy on the Board created by the resignation, removal, incapacity or death of any Director elected pursuant to this Section 10.1.1(d) shall only be filled by another individual nominated by Sutter Hill.

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(e) the then-serving Chief Executive Officer, if nominated by the holders of at least a majority of the votes attributable to the then outstanding Ordinary Shares to serve on the Board. No member of the Board elected pursuant to this Section 10.1.1(e) may be removed unless the holders of at least a majority of the votes attributable to the then outstanding Ordinary Shares elect to remove such Director or such Director ceases to act as Chief Executive Officer of the Company (whether voluntarily or involuntarily). Any vacancy on the Board created by the resignation, removal, incapacity or death of any Director elected pursuant to this Section 10.1.1(e) shall only be filled by another individual nominated pursuant to this Section 10.1.1(e).

(f) one (1) individual nominated by the Chief Executive Officer of the Company and approved by each of the Directors nominated pursuant to Article 62(a) through (e) hereof shall serve on the Board. Such director shall be independent within the meaning of the rules and regulations of the relevant stock exchange upon the closing of a Qualified Public Offering.

(g) one (1) individual nominated by the Chief Executive Officer of the Company and approved by each of the Directors nominated pursuant to Article 62(a) through (e) hereof shall serve on the Board. Such director shall be both independent and a financial expert within the meaning of the relevant rules and regulations of the relevant stock exchange upon the closing of a Qualified Public Offering.

10.1.2 Board Meeting. Regular meetings of the Board shall be convened by the Chairman of the Board at least once every three (3) months. Not less than seven (7) Business Days’ prior written notice of any meeting of the Board shall be given to all Directors with the following materials: (i) a written notice of the meeting; (ii) a meeting agenda for the meeting; and (iii) documents needed to be reported and distributed to the Directors; provided, however, that such notice period may be waived if approved by all of the Directors in writing. The location of each meeting of the Board shall be decided by the Chairman of the Board or if such is not available as agreed to by a majority of the Directors. The minutes of all Board meetings shall be kept on file by the Company.

10.1.3 Meetings by Telephone or Video Conference. Directors may participate in a meeting of the Board by means of telephone conference, video conference or similar communications equipment whereby all persons participating in the meeting can hear each other at the same time.

10.1.4 Remuneration. Directors shall serve without any remuneration, but all reasonable costs (including travel expenses) incurred by the Directors in the performance of their duties as members of the entire Board shall be borne by the Company.

10.1.5 Quorum. A meeting of the Board is duly constituted if there are present at least four (4) Directors throughout the meeting.

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10.1.6 Voting Rights. At any Board meeting, each Director may exercise one (1) vote. The adoption of any resolution of the Board shall require the affirmative votes of at least four (4) Directors present at a duly constituted meeting of the Board. Board resolutions may be adopted by written consent executed by all Directors, subject to the New M&AA and applicable law.

10.1.7 Failure to Designate a Board Member. In the absence of any designation from the persons or groups with the right to designate a director as specified above, the director previously designated by them and then serving shall be reelected if still eligible to serve as provided herein.

10.1.8 No Liability for Election of Recommended Director. None of the parties hereto and no officer, director, shareholder, partner, member, employee or agent of any party makes any representation or warranty as to the fitness or competence of the nominee of any party hereunder to serve on the Board by virtue of such party’s execution of this Agreement or by the act of such party in voting for such nominee pursuant to this Agreement.

10.1.9 Director and Officer Insurance. The Company shall use its best efforts to obtain from financially sound and reputable insurers and maintain in full force and effect director and officer liability insurance with terms and policy limits satisfactory to the Board of Directors.

10.1.10 Successor Indemnification. If the Company or any of its successors or assignees consolidates with or merges into any other person or entity and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of members of the Board of Directors as in effect immediately before such transaction, whether such obligations are contained in the New M&AA or elsewhere, as the case may be. Notwithstanding anything in this Section to the contrary, in lieu of the assumption of such coverage, the successors and assignees of the Company may substitute a prepaid “tail” policy for such coverage.

10.2 Shareholders Meeting.

10.2.1 Notice. The Board shall give not less than seven (7) Business Days’ notice of meetings of Shareholders to those persons whose names on the date the notice is given appear as Shareholders in the register of members of the Company and are entitled to vote at the meeting.

10.2.2 Quorum. A meeting of the Shareholders is duly constituted if, at the commencement of and throughout the meeting, there are present in person or by proxy:

(a) the holder(s) of Preferred Shares holding no less than an aggregate of sixty percent (60%) of all Preferred Shares on an as-converted basis; and

(b) the holders of Ordinary Shares holding not less than an aggregate of eighty percent (80%) of all Ordinary Shares in issue.

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10.2.3 Voting Rights. The voting rights of each class of the Company’s Shares shall be as provided in the New M&AA.

10.3 Vote to Increase Authorized Ordinary Shares. The Shareholders agree (on behalf of themselves and any transferee or assignee) to vote or cause to be voted all Ordinary Shares, Preferred Shares and any other shares of voting securities of the Company now owned or hereafter acquired or controlled by them, attend all meetings whether in person or by proxy (or shall consent pursuant to an action by written consent), and otherwise to use their respective best efforts as Shareholders and Directors, from time to time and at all times, in whatever manner as shall be necessary to increase the number of authorized Ordinary Shares from time to time to ensure that there will be sufficient Ordinary Shares available for conversion of all of the Preferred Shares outstanding at any given time.

11. EQUITY CONTROL AND SERVICE AGREEMENTS

11.1 The Shareholders shall take all appropriate and commercially reasonable actions to enforce the Company’s or any of the Company’s subsidiary’s rights under the Equity Control and Service Agreements.

12. MISCELLANEOUS

12.1 Successors and Assigns.

This Agreement shall be binding on and inure for the benefit of the successors, permitted assigns and personal representatives (as the case may be) of each of the Parties hereto.

12.2 Cumulative Rights.

Unless otherwise provided in this Agreement, any remedy conferred on any Party hereto for breach of this Agreement shall be in addition and without prejudice to all other rights and remedies available to it.

12.3 Effect.

This Agreement shall take effect from the consummation of the Series F funding transaction contemplated in the Share Purchase Agreement and continue to be effective for an infinite term unless and until earlier terminated by written consent of all Parties.

12.4 Entire Agreement; Amendments.

This Agreement shall supersede all and any previous shareholders’ agreements, or any other agreements, understandings or arrangements (if any) between and among the Parties hereto or any of them in relation to the subject matter hereof and all or any such previous agreements, understandings or arrangements (if any) shall cease and determine with effect from the date hereof. This Agreement constitutes the whole agreement between and among the Parties hereto or any of them in relation to the subject matter hereof (no Party having relied on any representation, warranty or undertaking made by any other Party which is not a term of this Agreement). The Prior Shareholders’ Agreement is hereby amended and restated in its entirety and shall be of no further force or effect.

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Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of each of (i) the Company, and (ii) the Holders. Any amendment or waiver effected in accordance with this paragraph shall be binding upon the Parties and their respective successors and assigns.

12.5 Further Assurance.

Each of the Parties hereto undertakes with each of the other Parties that it shall do, or shall procure to be done, all such acts and things and shall execute, or shall procure to be executed, all such documents as may be necessary or appropriate to implement the provisions of this Agreement or otherwise to give full legal force and effect thereof.

12.6 Severability.

The Parties hereto intended that the provisions of this Agreement shall be enforced to the maximum extent permissible under the laws applied in each jurisdiction in which enforcement of any provisions of this Agreement is sought. If any particular provision or part of this Agreement shall be held to be invalid or unenforceable, this Agreement shall be deemed to be amended by the deletion of the provision or part held to be invalid or unenforceable or, to the extent permissible by the applicable laws of the relevant jurisdiction in which such enforcement is sought, such provision or part shall be deemed to be varied in such a way as to achieve most closely the purpose of the original provision or part in a manner which is valid and enforceable, provided that for the avoidance of doubt, such amendments shall apply only with respect to the operation of this Agreement in the particular jurisdiction in which the decision as to invalidity or unenforceability is made.

12.7 Non-Waiver.

No delay or omission on the part of any Party hereto in exercising any right, power or privilege shall operate to impair such right, power or privilege or be construed as a waiver by such Party of the same and no single or partial exercise or non-exercise or delay in exercising any right, power or privilege by any Party hereto shall in any circumstances preclude any other or further exercise by such Party of such right, power or privilege or the exercise of any other right, power or privilege by such Party.

12.8 Payments.

All sums payable by any Party hereto under this Agreement shall be made free of any set-off, counterclaim or other deduction of any nature whatsoever, except as may be required by law.

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12.9 Counterparts.

This Agreement may be executed in counterparts and by different Parties hereto on separate copies or counterparts and which taken together shall constitute one and the same agreement. The facsimile transmissions of any executed original document (including without limitation, any page of an original document on which an original signature appears) and/or retransmission of any such facsimile transmission shall be deemed to be the same as the delivery of an executed original. At the request of any Party hereto, the other Parties hereto shall confirm facsimile transmissions by executing duplicate original documents and delivering the same to the requesting Party or Parties.

12.10 Time of Essence.

Time shall be of essence in this Agreement and this Section shall apply to any extension of time in relation to this Agreement as may be agreed by the Parties hereto from time to time.

12.11 Dispute Resolution; Governing Law.

(i) Except as set forth in Section 12.11(viii), any dispute, controversy or claim arising out of or relating to this Agreement, or the interpretation, breach, termination or validity hereof, shall be resolved through consultation. Such consultation shall begin immediately after one Party hereto has delivered to the other Party hereto a written request for such consultation. If within fifteen (15) Business Days following the date on which such notice is given the dispute cannot be resolved, the dispute shall be submitted to arbitration upon the request of either Party with notice to the other.

(ii) Within ten (10) Business Days following receipt of a request for arbitration pursuant to Section 12.11(i), the other Party may, by written request to the Party requesting arbitration, add additional issues to be resolved. The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong International Arbitration Centre (“HKIAC”) in accordance with its arbitration rules. There shall be a single arbitrator. If the Parties do not agree to appoint an arbitrator who has consented to participate within twenty (20) Business Days after a notice of arbitration, the relevant appointment shall be made by HKIAC. The arbitrator shall not be an employee, director or shareholder of any Party or of an Affiliate of any Party and shall have had experience in arbitrating disputes involving private equity investments by non-Chinese investors in China.¹

(iii) The arbitration proceedings shall be conducted in English.

(iv) This Agreement shall be governed by laws of the State of New York, without giving effect to its laws regarding conflict of laws. The arbitrators shall decide any dispute submitted by the Parties to the arbitration strictly in accordance with the substantive law of New York and shall not apply any other substantive law.

¹ Please see comments in SPA in respect of arbitration.

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(v) Each Party hereto shall cooperate with the other(s) in making full disclosure of and providing complete access to all information and documents requested by the other in connection with such arbitration proceedings, subject only to any confidentiality obligations binding on such Party.

(vi) The award of the arbitration tribunal shall be final and binding upon the disputing Parties, and the prevailing Party may apply to a court of competent jurisdiction for enforcement of such award.

(vii) Any Party in dispute with another shall be entitled to seek preliminary injunctive relief from any court of competent jurisdiction pending the constitution of the arbitral tribunal.

(viii) Notwithstanding anything herein to the contrary, the Parties hereby declare that it is impossible to measure in money the damages which will accrue to a Party or to its heirs, personal representatives, or assigns by reason of a failure to perform any of the obligations under Section 3 and Section 10 of this Agreement and agree that the terms of this Agreement shall be specifically enforceable. If any Party or its heirs, personal representatives, or assigns institutes any action or proceeding to specifically enforce the provisions hereof, any person against whom such action or proceeding is brought hereby waives the claim or defense therein that such Party or such personal representative has an adequate remedy at law, and such person shall not offer in any such action or proceeding the claim or defense that such remedy at law exists.

12.12 Aggregation of Shares. All Shares held or acquired by affiliated entities or persons, including Shares held by individuals or entities having the same registered investment advisor, shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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[Signature Page]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

COMPANY:

For and on behalf of:
Youku.com Inc.
By:	/s/ Victor Wing Cheung Koo
Name:	Victor Wing Cheung Koo
Position:	Director and Chief Executive Officer
Address:	5th Floor, SinoSteel Plaza 8 Haidian Street, Haidian District Beijing 100080
Attn:	Dele Liu, Chief Financial Officer
Fax:	(8610) 8460 8311

FOUNDER:

For and on behalf of:
1Look Holdings Ltd.
By:	/s/ Victor Wing Cheung Koo
Name:
Position:
Address:	5th Floor, SinoSteel Plaza 8 Haidian Street, Haidian District Beijing 100080
Attn:	Victor Wing Cheung Koo
Fax:	(8610) 8460 8311

[The Company’s and the Founder’s Signature Page to the Shareholders’ Agreement]

Series A Preferred Shareholders:

For and on behalf of FARALLON CAPITAL PARTNERS, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS II, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS III, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL OFFSHORE INVESTORS II, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member

[Series A Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of CHENGWEI PARTNERS, L.P.
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
For and on behalf of CHENGWEI VENTURES EVERGREEN FUND, L.P.
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
For and on behalf of CHENGWEI VENTURES EVERGREEN ADVISORS FUND, LLC
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer

[Series A Shareholders’ Signature Page to Shareholders’ Agreement]

Series B Preferred Shareholders:

For and on behalf of CHENGWEI PARTNERS, L.P.
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
For and on behalf of CHENGWEI VENTURES EVERGREEN FUND, L.P.
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
For and on behalf of CHENGWEI VENTURES EVERGREEN ADVISORS FUND, LLC
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer

[Series B Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of FARALLON CAPITAL PARTNERS, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS II, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS III, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL OFFSHORE INVESTORS II, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member

[Series B Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of SUTTER HILL VENTURES
Signature:	/s/ G. LEONARD BAKER, Jr.
Name:	G. LEONARD BAKER, Jr.
Position:	Managing Director of its General Partner
For and on behalf of DAVID L. ANDERSON
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	DAVID L. ANDERSON
Position:
For and on behalf of ANVEST, L.P.
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	David L. Anderson
Position:	General Partner
For and on behalf of G. LEONARD BAKER, JR.
Signature:	/s/ G. LEONARD BAKER, Jr.
Name:	G. LEONARD BAKER, Jr.
Position:
For and on behalf of SAUNDERS HOLDINGS, L.P.
Signature:	/s/ G. LEONARD BAKER, Jr.
Name:	G. LEONARD BAKER, Jr.
Position:	General Partner
For and on behalf of WILLIAM H. YOUNGER, JR.
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	William H. Younger, Jr.
Position:
For and on behalf of TENCH COXE
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	TENCH COXE
Position:
For and on behalf of GREGORY P. SANDS
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Gregory P. Sands
Position:

[Series B Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of JAMES C. GAITHER
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	James C. Gaither
Position:
For and on behalf of JAMES N. WHITE
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	James N. White
Position:
For and on behalf of JEFFREY W. BIRD
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Jeffrey W. Bird
Position:
For and on behalf of DAVID E. SWEET
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	David E. Sweet
Position:
For and on behalf of SHERRYL W. CASELLA
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Sherryl W. Casella
Position:
For and on behalf of LYNNE B. GRAW
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	LYNNE B. GRAW
Position:
For and on behalf of DIANE J. NAAR
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:
Position:
For and on behalf of PATRICIA TOM
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	PATRICIA TOM
Position:
For and on behalf of ROBERT YIN
Signature:	/s/ Robert Yin
Name:	Robert Yin
Position:

[Series B Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY (DAPER1)
Signature:	/s/ Kristal Dehnad
Name:	Kristal Dehnad
Position:	Associate Director, Charitable Trust Program Stanford Management Company
For and on behalf of THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY (SBST)
Signature:	/s/ Kristal Dehnad (Attorney-in-fact)
Name:	Kristal Dehnad
Position:	Associate Director, Charitable Trust Program Stanford Management Company

[Series B Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of LAUREN L. YOUNGER
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:
Position:

[Series B Shareholders’ Signature Page to Shareholders’ Agreement]

Series C Preferred Shareholders

For and on behalf of BROOKSIDE CAPITAL PARTNERS FUND, L.P.

Signature:	/s/ Matt McPherron
Name:	Matt McPherron
Position:	MANAGING DIRECTOR

[Series C Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of JAEWOONG LEE

/s/ Jaewoong Lee

Jaewoong Lee

[Series C Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of CHENGWEI PARTNERS, L.P.
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
For and on behalf of CHENGWEI VENTURES EVERGREEN FUND, L.P.
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
For and on behalf of CHENGWEI VENTURES EVERGREEN ADVISORS FUND, LLC
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer

[Series C Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of FARALLON CAPITAL PARTNERS, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS II, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS III, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL OFFSHORE INVESTORS II, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member

[Series C Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of SUTTER HILL VENTURES
Signature:	/s/ G. LEONARD BAKER, Jr.
Name:	G. LEONARD BAKER, Jr.
Position:	Managing Director of its General Partner
For and on behalf of DAVID L. ANDERSON
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	DAVID L. ANDERSON
Position:
For and on behalf of ANVEST, L.P.
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	David L. Anderson
Position:	General Partner
For and on behalf of G. LEONARD BAKER, JR.
Signature:	/s/ G. LEONARD BAKER, Jr.
Name:	G. LEONARD BAKER, Jr.
Position:
For and on behalf of SAUNDERS HOLDINGS, L.P.
Signature:	/s/ G. LEONARD BAKER, Jr.
Name:	G. LEONARD BAKER, Jr.
Position:	General Partner
For and on behalf of WILLIAM H. YOUNGER, JR.
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	William H. Younger, Jr.
Position:
For and on behalf of YOVEST, L.P.
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	William H. Younger, Jr.
Position:	Trustee of The Younger Living Trust U/A/D 1/20/95 its General Partner
For and on behalf of GREGORY P. SANDS
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Gregory P. Sands
Position:
For and on behalf of TENCH COXE
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	TENCH COXE
Position:

[Series C Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of JAMES C. GAITHER
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	James C. Gaither
Position:
For and on behalf of JAMES N. WHITE
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	James N. White
Position:
For and on behalf of JEFFREY W. BIRD
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Jeffrey W. Bird
Position:
For and on behalf of ANDREW T. SHEEHAN
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Andrew T. Sheehan
Position:
For and on behalf of DAVID E. SWEET
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	DAVID E. SWEET
Position:
For and on behalf of SHERRYL W. CASELLA
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Sherryl W. Casella
Position:
For and on behalf of LYNNE B. GRAW
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	LYNNE B. GRAW
Position:
For and on behalf of DIANE J. NAAR
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:
Position:

[Series C Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of YU-YING CHIU CHEN
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Yu-Ying Chiu Chen
Position:
For and on behalf of PATRICIA TOM
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Patricia Tom
Position:
For and on behalf of ROBERT YIN
Signature:	/s/ Robert Yin
Name:
Position:

[Series C Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY (DAPER1)
Signature:	/s/ Kristal Dehnad
Name:	Kristal Dehnad
Position:	Associate Director, Charitable Trust Program Stanford Management Company
For and on behalf of THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY (SBST)
Signature:	/s/ Kristal Dehnad
Name:	Kristal Dehnad
Position:	Associate Director, Charitable Trust Program Stanford Management Company

[Series C Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of LAUREN L. YOUNGER
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:
Position:

[Series C Shareholders’ Signature Page to Shareholders’ Agreement]

Series D Preferred Shareholders

For and on behalf of:
MAVERICK FUND PRIVATE INVESTMENTS, LTD.
By:	Maverick Capital, Ltd., under Power of Attorney effective as of December 30, 2008
	By:	/s/ John T. McCafferty
		John T. McCafferty
		Limited Partner & General Counsel
MAVERICK USA II, CORP.
By:	Maverick Capital, Ltd., its Attorney-in-Fact
	By:	/s/ John T. McCafferty
		John T. McCafferty
		Limited Partner & General Counsel
MAVERICK II HOLDINGS, LTD.
By:	Maverick Capital, Ltd., its Attorney-in-Fact
	By:	/s/ John T. McCafferty
		John T. McCafferty
		Limited Partner & General Counsel

[Series D Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of BROOKSIDE CAPITAL PARTNERS FUND, L.P.
Signature:	/s/ Matt McPherron
Name:	Matt McPherron
Position:	MANAGING DIRECTOR

[Series D Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of CHENGWEI PARTNERS, L.P.
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
For and on behalf of CHENGWEI VENTURES EVERGREEN FUND, L.P.
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
For and on behalf of CHENGWEI VENTURES EVERGREEN ADVISORS FUND, LLC
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer

[Series D Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of FARALLON CAPITAL PARTNERS, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS II, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS III, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL OFFSHORE INVESTORS II, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member

[Series D Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of SUTTER HILL VENTURES
Signature:	/s/ G. LEONARD BAKER, Jr.
Name:	G. LEONARD BAKER, Jr.
Position:	Managing Director of its General Partner
For and on behalf of DAVID L. ANDERSON
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	DAVID L. ANDERSON
Position:
For and on behalf of G. LEONARD BAKER, JR.
Signature:	/s/ G. LEONARD BAKER, Jr.
Name:	G. LEONARD BAKER, Jr.
Position:
For and on behalf of SAUNDERS HOLDINGS, L.P.
Signature:	/s/ G. LEONARD BAKER, Jr.
Name:	G. LEONARD BAKER, Jr.
Position:	General Partner
For and on behalf of YOVEST, L.P.
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	William H. Younger, Jr.
Position:	Trustee of The Younger Living Trust U/A/D 1/20/95 its General Partner
For and on behalf of GREGORY P. SANDS
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Gregory P. Sands
Position:
For and on behalf of TENCH COXE
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	TENCH COXE
Position:
For and on behalf of JAMES C. GAITHER
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	James C. Gaither
Position:
For and on behalf of JAMES N. WHITE
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	JAMES N. WHITE
Position:

[Series D Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of JEFFREY W. BIRD
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Jeffrey W. Bird
Position:
For and on behalf of ANDREW T. SHEEHAN
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Andrew T. Sheehan
Position:
For and on behalf of DAVID E. SWEET
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	DAVID E. SWEET
Position:
For and on behalf of SHERRYL W. CASELLA
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Sherryl W. Casella
Position:
For and on behalf of LYNNE B. GRAW
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	LYNNE B. GRAW
Position:
For and on behalf of DIANE J. NAAR
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:
Position:
For and on behalf of YU-YING CHIU CHEN
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Ying Chen
Position:
For and on behalf of PATRICIA TOM
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	PATRICIA TOM
Position:

[Series D Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of ROBERT YIN
Signature:	/s/ Robert Yin
Name:	Robert Yin
Position:

[Series D Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY (DAPER1)
Signature:	/s/ Kristal Dehnad
Name:	Kristal Dehnad
Position:	Associate Director, Charitable Trust Program Stanford Management Company
For and on behalf of THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY (SBST)
Signature:	/s/ Kristal Dehnad
Name:	Kristal Dehnad
Position:	Associate Director, Charitable Trust Program Stanford Management Company

[Series D Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of VENTURE LENDING & LEASING IV, LLC
By:	Westech Investment Advisors, Inc., a California corporation
Its:	Managing Member
Signature:	/s/ Maurice Werdegar
Name:	Maurice Werdegar
Position:	Vice President
For and on behalf of VENTURE LENDING & LEASING V, LLC
By:	Westech Investment Advisors, Inc., a California corporation
Its:	Managing Member
Signature:	/s/ Maurice Werdegar
Name:	Maurice Werdegar
Position:	Vice President
GREGORY P. ARRESE
Signature:	/s/ Gregory P. Arrese
STEVEN D. ABBOTT
Signature:	/s/ Steven D. Abbott
GARRY MENZEL
Signature:	/s/ Garry Menzel

[Series D Shareholders’ Signature Page to Shareholders’ Agreement]

Series E Preferred Shareholders

For and on behalf of:

MAVERICK FUND PRIVATE INVESTMENTS, LTD.

By:	Maverick Capital, Ltd., under Power of Attorney effective as of December 30, 2008
	By:	/s/ John T. McCafferty
		John T. McCafferty
		Limited Partner & General Counsel

MAVERICK USA II, CORP.

By:	Maverick Capital, Ltd., its Attorney-in-Fact
	By:	/s/ John T. McCafferty
		John T. McCafferty
		Limited Partner & General Counsel

[Series E Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of BROOKSIDE CAPITAL PARTNERS FUND, L.P.

Signature:	/s/ Matt McPherron
Name:	Matt McPherron
Position:	MANAGING DIRECTOR

[Series E Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of CHENGWEI PARTNERS, L.P.

By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer

For and on behalf of CHENGWEI VENTURES EVERGREEN FUND, L.P.

By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer

For and on behalf of CHENGWEI VENTURES EVERGREEN ADVISORS FUND, LLC

By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer

[Series E Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of SUTTER HILL VENTURES

Signature:	/s/ G. LEONARD BAKER, Jr.
Name:	G. LEONARD BAKER, Jr.
Position:	Managing Director of its General Partner

For and on behalf of ANVEST, L.P.

Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	DAVID L. ANDERSON
Position:	General Partner

For and on behalf of SAUNDERS HOLDINGS, L.P.

Signature:	/s/ G. LEONARD BAKER, Jr.
Name:	G. LEONARD BAKER, Jr.
Position:	General Partner

For and on behalf of ROOSTER PARTNERS, LP

Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Tench Coxe, Trustee of The Coxe Revocable Trust U/A/D 4/23/98
Position:	General Partner

GREGORY P. SANDS

Signature: /s/ Robert Yin (Attorney-in-fact)

JAMES N. WHITE

Signature: /s/ Robert Yin (Attorney-in-fact)

JEFFREY W. BIRD

Signature: /s/ Robert Yin (Attorney-in-fact)

For and on behalf of WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN

FBO SHERRYL W. CASELLA

Signature:	/s/ Vicki M. Bandel
	ASSISTANT VICE PRESIDENT
	TRUST OFFICER

For and on behalf of WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN

FBO DAVID L. ANDERSON

Signature:	/s/ Vicki M. Bandel
	ASSISTANT VICE PRESIDENT
	TRUST OFFICER

[Series E Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO G. LEONARD BAKER, JR.
Signature:	/s/ Vicki M. Bandel
	ASSISTANT VICE PRESIDENT
	TRUST OFFICER
For and on behalf of WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO WILLIAM H. YOUNGER, JR.
Signature:	/s/ Vicki M. Bandel
	ASSISTANT VICE PRESIDENT
	TRUST OFFICER
For and on behalf of WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO TENCH COXE
Signature:	/s/ Vicki M. Bandel
	ASSISTANT VICE PRESIDENT
	TRUST OFFICER
For and on behalf of WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO ANDREW T. SHEEHAN
Signature:	/s/ Vicki M. Bandel
	ASSISTANT VICE PRESIDENT
	TRUST OFFICER
For and on behalf of WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO DAVID E. SWEET (ROLLOVER)
Signature:	/s/ Vicki M. Bandel
	ASSISTANT VICE PRESIDENT
	TRUST OFFICER
For and on behalf of WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO LYNNE B. GRAW
Signature:	/s/ Vicki M. Bandel
	ASSISTANT VICE PRESIDENT
	TRUST OFFICER
For and on behalf of WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO DIANE J. NAAR
Signature:	/s/ Vicki M. Bandel
	ASSISTANT VICE PRESIDENT
	TRUST OFFICER

[Series E Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN

FBO YU-YING CHEN

Signature:	/s/ Vicki M. Bandel
	ASSISTANT VICE PRESIDENT
	TRUST OFFICER
For and on behalf of WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO PATRICIA TOM (ROLLOVER)
Signature:	/s/ Vicki M. Bandel
	ASSISTANT VICE PRESIDENT
	TRUST OFFICER
For and on behalf of WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO ROBERT YIN
Signature:	/s/ Vicki M. Bandel
	ASSISTANT VICE PRESIDENT
	TRUST OFFICER

[Series E Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY (DAPER1)

Signature:	/s/ Kristal Dehnad
Name:	Kristal Dehnad
Position:	Associate Director, Charitable Trust Program Stanford Management Company
For and on behalf of THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY (SBST)
Signature:	/s/ Kristal Dehnad
Name:	Kristal Dehnad
Position:	Associate Director, Charitable Trust Program Stanford Management Company

[Series E Shareholders’ Signature Page to Shareholders’ Agreement]

Series F Preferred Shareholders
For and on behalf of:
SERIES F PREFERRED SHAREHOLDER
For and on behalf of FARALLON CAPITAL PARTNERS, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS II, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL INSTITUTIONAL PARTNERS III, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member
For and on behalf of FARALLON CAPITAL OFFSHORE INVESTORS II, L.P.
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Position:	Managing Member

[Series F Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of CHENGWEI PARTNERS, L.P.
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
For and on behalf of CHENGWEI VENTURES EVERGREEN FUND, L.P.
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
For and on behalf of CHENGWEI VENTURES EVERGREEN ADVISORS FUND, LLC
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer

[Series F Shareholders’ Signature Page to Shareholders’ Agreement]

For and on behalf of BROOKSIDE CAPITAL PARTNERS Fund, L.P.
Signature:	/s/ Matt McPherron
Name:	Matt McPherron
Position:	MANAGING DIRECTOR

[Series F Shareholders’ Signature Page to Shareholders’ Agreement]

MAVERICK USA II, CORP.
By:	Maverick Capital, Ltd., its Attorney-in-Fact
	By:	/s/ John T. McCafferty
		John T. McCafferty
		Limited Partner & General Counsel

[Series F Shareholders’ Signature Page to Shareholders’ Agreement]

SERIES F INVESTOR
T. ROWE PRICE ASSOCIATES, INC.
On behalf of its advisory Funds and Accounts on Attachment A
T. ROWE PRICE ASSOCIATES, INC.
For and on Behalf of:
T. Rowe Price New Horizons Fund, Inc.
T. Rowe Price New Horizons Trust
T. Rowe Price U.S. Equities Trust
By:	/s/ Kris H. Jenner
Name:	Kris H. Jenner
Title:	Vice President
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Attention: Andrew Baek
Vice President and Senior Legal Counsel
Phone: 410-345-2090
Email: Andrew_baek@troweprice.com

[Series F Shareholders’ Signature Page to Shareholders’ Agreement]

SERIES F INVESTOR
T. ROWE PRICE ASSOCIATES, INC.
On behalf of its advisory Funds and Accounts on
Attachment A
T. ROWE PRICE ASSOCIATES, INC.
For and on Behalf of:
T. Rowe Price Global Technology Fund, Inc.
TD Mutual Funds – TD Science & Technology Fund
By:	/s/ David J. Eiswert
Name:	David J. Eiswert
Title:	Vice President
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Attention:	Andrew Baek
Vice President and Senior Legal Counsel
Phone:	410-345-2090
Email:	Andrew_baek@troweprice.com

[Series F Shareholders’ Signature Page to Shareholders’ Agreement]

SERIES F INVESTOR
T. ROWE PRICE ASSOCIATES, INC.
On behalf of its advisory Funds and Accounts on
Attachment A
T. ROWE PRICE ASSOCIATES, INC.
For and on Behalf of:
T. Rowe Price Science & Technology Fund, Inc.
Valic Company I – Science & Technology Fund
John Hancock Trust – Science & Technology Trust
By:	/s/ David J. Eiswert
Name:	David J. Eiswert
Title:	Vice President
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Attention:	Andrew Baek
Vice President and Senior Legal Counsel
Phone:	410-345-2090
Email:	Andrew_baek@troweprice.com

[Series F Shareholders’ Signature Page to Shareholders’ Agreement]

MORGAN STANLEY INVESTMENT MANAGEMENT SMALL COMPANY GROWTH TRUST
By:	State Street Bank and Trust Company
Trustee
By:	/s/ James E. Hachey
Name:	James E. Hachey
Title:	Vice President
Address:	c/o Morgan Stanley Investment Management
	522 Fifth Avenue
	New York, New York 10036
MORGAN STANLEY INSTITUTIONAL FUND, INC. – SMALL COMPANY GROWTH PORTFOLIO
By:	Morgan Stanley Investment Management Inc.
Investment Manager
By:	/s/ Jason Yeung
Name:	Jason Yeung
Title:	Executive Director
Address:	522 Fifth Avenue
	New York, New York 10036
THE UNIVERSAL INSTITUTIONAL FUNDS, INC. – SMALL COMPANY GROWTH PORTFOLIO
By:	Morgan Stanley Investment Management Inc.
Investment Manager
By:	/s/ Jason Yeung
Name:	Jason Yeung
Title:	Executive Director
Address:	522 Fifth Avenue
	New York, New York 10036
NATIONWIDE VARIABLE INSURANCE TRUST – NVIT MULTI-MANAGER SMALL COMPANY FUND
By:	Morgan Stanley Investment Management Inc.
Sub-Adviser
By:	/s/ Jason Yeung
Name:	Jason Yeung
Title:	Executive Director
Address:	522 Fifth Avenue
	New York, New York 10036

[Series F Shareholders’ Signature Page to Shareholders’ Agreement]

TRANSAMERICA FUNDS – TRANSAMERICA MORGAN STANLEY SMALL COMPANY GROWTH
By:	Morgan Stanley Investment Management Inc.
Sub-Adviser
By:	/s/ Jason Yeung
Name:	Jason Yeung
Title:	Executive Director
Address:	522 Fifth Avenue
	New York, New York 10036
BELL ATLANTIC MASTER TRUST
By:	Morgan Stanley Investment Management Inc.
Investment Manager
By:	/s/ Jason Yeung
Name:	Jason Yeung
Title:	Executive Director
Address:	522 Fifth Avenue
	New York, New York 10036
MORGAN STANLEY INSTITUTIONAL FUND, INC. – INTERNATIONAL OPPORTUNITY PORTFOLIO
By:	Morgan Stanley Investment Management Inc.
Investment Manager
By:	/s/ Jason Yeung
Name:	Jason Yeung
Title:	Executive Director
Address:	522 Fifth Avenue
	New York, NY 10036

[Series F Shareholders’ Signature Page to Shareholders’ Agreement]

MORGAN STANLEY INSTITUTIONAL FUND, INC. – GLOBAL GROWTH PORTFOLIO
By:	Morgan Stanley Investment Management Inc.
Investment Manager
By:	/s/ Jason Yeung
Name:	Jason Yeung
Title:	Executive Director
Address:	522 Fifth Avenue
	New York, NY 110036

[Series F Shareholders’ Signature Page to Shareholders’ Agreement]

EX-4.5

Exhibit 4.5

Execution Version

Dated 25 November 2009

SHARE PURCHASE AGREEMENT

Regarding Series E Preferred Shares in

Youku.com Inc.

(a private company limited by shares incorporated in the Cayman Islands)

TRANSASIA LAWYERS

Suite 2218 China World Tower 1

Jianguomenwai Avenue

Beijing 100004, China

K&L GATES LLP

1717 Main Street, Suite 2800

Dallas, Texas USA

TABLE OF CONTENTS

1.	INTERPRETATION	2
2.	SUBSCRIPTION FOR SERIES E PREFERRED SHARES	8
3.	[INTENTIONALLY OMITTED]	8
4.	CONDITIONS PRECEDENT AND COVENANTS OF THE COMPANY	9
5.	CONDITIONS PRECEDENT AND COVENANTS OF THE SERIES E INVESTORS	11
6.	CLOSING	11
7.	WARRANTIES	13
8.	SERIES E INVESTOR WARRANTIES	14
9.	CERTAIN US TAX MATTERS	15
10.	INDEMNIFICATION	16
11.	SPECIAL COVENANTS AFTER CLOSING	17
12.	NOTICES	18
13.	CONFIDENTIALITY	18
14.	COSTS AND EXPENSES	20
15.	MISCELLANEOUS	20
16.	DISPUTE RESOLUTION	24

Execution Version

Youku.com Inc.

(a private company limited by shares incorporated in the Cayman Islands)

Series E Preferred Share Purchase Agreement

THIS SHARE PURCHASE AGREEMENT (this “Agreement”) is made on this 25^th day of November, 2009.

BY AND AMONG

1. Youku.com Inc., a Cayman Islands exempted company organized and existing under the laws of the Cayman Islands, with its registered office at Scotia Centre, 4^th Floor, P.O. Box 2804, George Town, Grand Cayman, Cayman Islands (the “Company”); and

2. The investors (each a “Series E Investor” and, collectively, the “Series E Investors”) set forth on the Series E Investor Signature Pages to this Agreement.

The Company and the Series E Investors may hereinafter collectively be referred to as “Parties” and respectively referred to as “Party”.

WHEREAS:

(A) The Company is a private company incorporated in the Cayman Islands with capitalization as before and after the Closing (as defined below in Section 2.1.1) set out in Schedule 1 attached hereto.

(B) By a Board resolution dated the date hereof, 209,849,890 of the Company’s Class E Convertible Preferred Shares, US$0.00001 par value (the “Series E Preferred Shares”) shall be issued and allotted to the Series E Investors pursuant to the terms hereof.

(C) Simultaneously with the execution of this Agreement, the Parties hereto and the holders of the Company’s Series A Preferred Shares (the “Series A Preferred Shareholders”), the holders of the Company’s Series B-1 Preferred Shares (the “Series B-1 Preferred Shareholders”), the holders of the Company’s Series B-2 Preferred Shares (the “Series B-2 Preferred Shareholders”, and together with the Series B-1 Preferred Shareholders, the “Series B Shareholders”), the holders of the Company’s Series C Preferred Shares (the “Series C Preferred Shareholders”), and the holders of the Company’s Series D Preferred Shares (the “Series D Preferred Shareholders”) are entering into an Amended and Restated Shareholders’ Agreement of even date herewith (the “Shareholders’ Agreement”). A copy of the Shareholders’ Agreement is annexed hereto as Exhibit 1.

1. INTERPRETATION

1.1 In this Agreement and the Schedules hereto, unless the context requires or provides otherwise:

”Ads Company”	means JiaHeYi Advertising (Beijing) Co., Ltd, a limited liability company established and existing under the laws of the People’s Republic of China, with its registered office at Room 602A, Dongsheng Building, 8 Zhongguancun Dong Lu, Haidian District, Beijing 100083, China;
”Affiliate”	with regard to a given person, means a person that controls, is controlled by or is under common control with the given person. For purposes of this Agreement, except as otherwise expressly provided, when used with respect to any person, “control” means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “affiliated”, “controlling and “controlled” have meanings correlative to the foregoing;
“Agreement”	has the meaning as set forth in the recitals;
“Board”	means the board of directors of the Company;
“Business Day”	means a day (other than a Saturday or Sunday) on which licensed banks are open for general banking business in the PRC and Hong Kong;
“Chief Executive Officer”	refers to Victor Wing Cheung Koo, the Company’s current chief executive officer;
“Chengwei”	means, collectively, Chengwei Partners, L.P., Chengwei Ventures Evergreen Fund, L.P., and Chengwei Ventures Evergreen Advisors Fund, LLC;
“Chief Financial Officer”	refers to Dele Liu, the Company’s current chief financial officer;
“Company”	has the meaning as set forth in the recitals;
“Closing”	subject to the fulfillment of the Conditions Precedent in Sections 4 and 5, means the closing of the transactions contemplated hereby;
“Closing Date”	means the date on which the Closing is to take place pursuant to Section 6;
“Conditions Precedent”	means the conditions precedent to each of the Closings as set out in Sections 4 and 5;

2

“Condition of the Company”	means the assets, business, properties, operations or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole;
“Disclosure Schedule”	means Schedule 3B;
“Employee(s)”	shall mean the employees, consultants, directors, and officers of the Company and its Subsidiaries;
“ESOP”	means the Employee Share Option Scheme as in effect on the date hereof;
“Exhibit”	means an exhibit attached to this Agreement;
“Foreign Official”	means an employee of a Governmental Authority, a foreign official, a member of a foreign political party, a foreign political candidate, an officer of a public international organization, or an officer or employee of a PRC state-owned enterprise, where the term “foreign” has the meaning ascribed to it under the United States Foreign Corrupt Practices Act;
“Governmental Authority”	means the government of any nation, state, city, locality or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing;
“Hong Kong”	means the Hong Kong Special Administrative Region of the PRC;
“ICP Co”	1 Verge Information Technology (Beijing) Co., Ltd, a limited liability company established and existing under the laws of the People’s Republic of China, with its registered office at 5th Floor, SinoSteel Plaza 8 Haidian Street, Haidian District Beijing 100080, China;
“Intellectual Property”	means (i) any and all registered or unregistered inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereon and any and all patents, patent applications and patent disclosures together with all reissuances, continuations, continuations-in-part, revisions, extensions and reexaminations thereof, (ii) all trademarks, service marks, trade dress, logos, domain names, trade names and corporate names, together with all translations, adaptations, derivations and combinations thereof and including all goodwill associated therewith, and all applications, registrations and renewals in connection therewith, (iii) all copyrightable works, all copyrights and all applications, registrations and renewals in connection therewith, (iv) all trade secrets and confidential business information (including, without limitation, ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals), (v) all computer software (including, without limitation, data and related documentation and except for any commercial “shrink-wrapped” software) and source codes, (vi) all other proprietary rights, and (vii) all licenses or agreements in connection with the foregoing;

3

“Knowledge”	means, together with words of similar meaning, with respect to the Company or its Subsidiaries, the actual knowledge after reasonable and due investigation, of the Company’s Chief Executive Officer or Chief Financial Officer;
“M&AA”	means the amended and restated memorandum and articles of association adopted pursuant to a shareholders special resolution of the Company dated the same date hereof, the form of which is attached hereto as Exhibit 2;
“Material Adverse Effect”	means any (i) adverse effect on the issuance or validity of the Subscription Shares or the transactions contemplated hereby or on the enforceability or validity, in any material respect, of the M&AA or on the ability of the Company to perform its obligations under this Agreement or the other Transaction Documents, or (ii) material adverse effect on the condition (financial or otherwise), properties, assets, liabilities, business, or operations of the Company or its Subsidiaries taken as a whole;
“Ordinary Shares”	means the ordinary shares of a par value of US$0.00001 each in the share capital of the Company;
“Party” or “Parties”	has the meaning as set forth in the recitals;

4

“PRC”	means the People’s Republic of China, which, for the purposes of this Agreement, shall exclude the Special Administrative Regions of Hong Kong and Macau and Taiwan;
”PRC Companies”	means the Ads Company and ICP Co;
“Preferred Shares”	means the Series A Preferred Shares, the Series B Preferred Shares, the Series C Preferred Shares, the Series D Preferred Shares, and the Series E Preferred Shares;
“Schedule”	means a schedule attached to this Agreement;
“Section”	means a section in this Agreement;
“Securities Act”	means the United States Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder;
“Series A Preferred Shareholders”	has the meaning as set forth in the recitals;
“Series A Preferred Shares”	means the Series A Preferred Shares of the Company of a par value of US$0.00001 each;
”Series B Preferred Shares”	means the Series B-1 Preferred Shares and the Series B-2 Preferred Shares;
“Series B Preferred Shareholders”	has the meaning as set forth in the recitals;
”Series B-1 Preferred Shares”	means the Series B-1 Preferred Shares of the Company of a par value of US$0.00001 each;
”Series B-2 Preferred Shares”	means the Series B-2 Preferred Shares of the Company of a par value of US$0.00001 each;
“Series C Preferred Shareholders”	has the meaning as set forth in the recitals;
“Series C Preferred Shares”	means the Series C Preferred Shares of the Company of a par value of US$0.00001 each;
“Series D Preferred Shareholders”	has the meaning as set forth in the recitals;

5

“Series D Preferred Shares”	means the Series D Preferred Shares of the Company of a par value of US$0.00001 each;
”Series E Investors”	has the meaning set forth in the Preamble;
“Series E Investors Warranties”	means the representations and warranties made by the Series E Investors pursuant to this Agreement as set out in Schedule 4 and the term “Series E Investor Warranty” shall be construed accordingly;
“Series E Preferred Shares”	has the meaning set forth in the recitals;
“Shareholder”	means any holder of a share in the share capital of the Company;
“Shareholders’ Agreement”	has the meaning set forth in the recitals;
“Share”	has the meaning set forth in the recitals;
“Subscription”	means the subscription by the Series E Investors for the Subscription Shares in accordance with the terms and conditions of this Agreement;
“Subscription Price”	means the price at which Subscription Shares are subscribed hereunder, namely US$0.190850707 per share;
“Subscription Shares”	has the meaning set forth in Section 2.1.1 hereof;
“Subsidiaries”	means the PRC Companies and 1Verge Internet Technology (Beijing) Co., Ltd., a limited liability company established and existing under the laws of the Republic of China, with its registered office at 22nd Floor, Building B, Sky Plaza, 46 Dong Wai Street, Dongcheng District, Beijing 100027, China;
“Transaction Documents”	has the meaning set forth in Section 4.5 hereof;
“United States Dollars” and “US$”	means the lawful currency of the USA;
“UNCITRAL”	means the United Nations Commission on International Trade Law;
“UNCITRAL Rules”	means the applicable arbitration rules of the United Nations Commission on International Trade Law;

6

“USA”	means the United States of America;
“Warranties”	means the representations and warranties made by the Warrantors pursuant to this Agreement as set out in Schedule 3A;
“Warrantors”	means the Company and all the Subsidiaries of the Company; and
“Warrantor Intellectual Property”	means all Intellectual Property which is used in connection with the business of the Warrantors and all Intellectual Property owned by the Warrantors, provided that any Intellectual Property that is licensed by the Warrantors shall be included within the meaning of Warrantor Intellectual Property only within the scope of use by the applicable Warrantor or in connection with such Warrantor’s business. Warrantor Intellectual Property includes, but shall not be limited to, (i) the following website domain names: Youku.com, Youku.com.cn, youku.net, yoqoo.com; (ii) the name “1Verge”; (iii) the domain name “1verge.com” and the Chinese domain names “1verge.com.cn”, “1verge.net.cn”, “1verge.cn”; and “1qoo.cn”, (iv) Chinese Trade Name “ ”, and (v) the trademark applications of “ ”, “ YoQoo.com ”, “YOUKU ” and “1VERGE and logo” in class 41 (online publication service, online game service, etc) in the People’s Republic of China.

1.2 In this Agreement, unless otherwise specified:

(i) references to Sections, sub-sections, paragraphs, sub-paragraphs, Schedules and Exhibits are to Sections, sub-sections, paragraphs, sub-paragraphs of, Schedules and Exhibits to this Agreement;

(ii) a reference to any statute or statutory provision shall be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or re-enacted;

(iii) references to a “company” shall be construed so as to include any company, corporation or other corporate body, wherever and however incorporated or established;

(iv) references to a “person” shall be construed so as to include any individual, firm, company, government, state or agency of a state or any joint venture, association or partnership (whether or not having separate legal personality);

7

(v) words imparting the singular shall include the plural and vice versa, words imparting one gender shall include all genders, and the term “including” means “including without limitation”;

(vi) references to writing shall include any communication made by letter, facsimile transmission, electronic mail and any other mode of reproducing words in a legible and non-transitory form;

(vii) references to times of day are to Beijing time;

(viii) headings to Sections, Schedules and Exhibits are for convenience of reference only and shall not affect the interpretation of this Agreement; and

(ix) the Schedules and Exhibits shall form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement, and any reference to this Agreement shall include the Schedules and Exhibits.

2. SUBSCRIPTION FOR SERIES E PREFERRED SHARES

2.1 Subscription for Series E Preferred Shares.

2.1.1 On the terms and subject to the conditions set out in this Agreement and subject to the satisfaction or waiver of the Conditions Precedent in Section 4, the Series E Investors shall hereby subscribe for and the Company shall at the closing of the Series E Preferred Shares funding transaction contemplated hereby (the “Closing”) allot and issue to the Series E Investors an aggregate of 209,849,890 Series E Preferred Shares (the “Subscription Shares”) for a total consideration of US$40,050,000 at a subscription price of US$0.190850707 per share (the “Subscription Price”) which Series E Preferred Shares shall carry the rights, interests, preferences and privileges under the Shareholders’ Agreement and the M&AA. Notwithstanding anything to the contrary in this Agreement, the Closing shall occur within ten (10) days of the date hereof.

2.1.2 Each Series E Investor shall at the Closing pay in full the amount for all the Subscription Shares allotted to such Series E Investor by wire transfer of immediately available funds into the bank account designated by the Company, as the consideration for the Subscription Shares. The allocation of Series E Preferred Shares at the Closing shall be in accordance with Schedule 2A attached hereto. Each of the Series E Investors’ obligation to fund its subscription for Series E Preferred Shares shall be several but not joint with respect to the Series E Preferred Shares that each has been allocated. A failure by any of the Series E Investors to fund its subscription shall not impair the rights of the rest of the Series E Investors or prevent the Closing with respect to the subscriptions of any other Series E Investor who has fully funded its subscription.

3. [INTENTIONALLY OMITTED]

8

4. CONDITIONS PRECEDENT AND COVENANTS OF THE COMPANY

Conditions to the Series E Investors’ Obligations at the Closing. As of the Closing Date and for the purpose of the Closing, the obligations of each Series E Investor under Section 6 hereunder shall be conditional upon the fulfillment of each of the following conditions, any of which may be waived in writing by such Series E Investor but solely as to such Series E Investor:

4.1 Representations and Warranties; Performance of Obligations.

The representations and warranties made by the Warrantors herein shall be true, complete and accurate in all material respects on and as of the date of this Agreement and the date of the Closing (except (i) to the extent any such Warranties expressly relate to an earlier date, in which case such Warranties shall be so true, complete, and accurate on and as of such earlier date; and (ii) those Warranties qualified by “Material Adverse Effect” which shall be true and accurate in all respects) with the same effect as though such representations and warranties had been made on and as of the date of this Agreement and of the Closing, and the Company shall have performed, in all material respects, all obligations and conditions herein required to be performed or observed by it on or prior to the Closing.

4.2 Legal Compliance.

The Company shall have performed and complied, in all material respects, with all obligations and requirements under any currently applicable laws, regulations, rules, orders, or decrees, in particular those in relation to applicable company and securities regulatory regimes and Intellectual Property rights protection in connection with the execution of this Agreement.

4.3 Necessary Approvals.

The Company shall have obtained all approvals, consents and qualifications, if necessary to execute this Agreement pursuant to the terms of this Agreement, the provisions of the M&AA, and applicable law.

4.4 Good Standing of the Company.

No event or transaction that has had or would reasonably be likely to have a Material Adverse Effect shall have occurred and the Company or its Subsidiaries shall not have any change in their respective capital structures (except for such changes taking place pursuant to this Agreement) during the interval beginning on the date of this Agreement and ending on the date of the Closing.

9

4.5 Definitive Transaction Documents.

The Company, the Series A Preferred Shareholders, the Series B Preferred Shareholders, the Series C Preferred Shareholders, the Series D Preferred Shareholders, and each other Series E Investor shall have duly executed and delivered to such Series E Investor all relevant transaction documents necessary to consummate the Closing contemplated herein to which they are a party, including, but not limited to (i) this Agreement; (ii) the M&AA; and (iii) the Shareholders’ Agreement and their respective schedules and exhibits hereto and thereto (the “Transaction Documents”).

4.6 No Litigation.

There is no outstanding or pending litigation or arbitration or other legal or contractual proceedings (including litigation or other such proceedings known to be threatened) taken by or against the Company or any of its Subsidiaries.

4.7 Bank Account Designation.

The Company shall have delivered to each Series E Investor the wire transfer instructions for the bank account information of the Company for the wire transfer of the Subscription Price by the Series E Investors.

4.8 The M&AA.

The M&AA shall have been filed with the Cayman Registry of Companies (“ROC”), and the Series E Investors shall have received confirmation from the ROC reasonably satisfactory to them that such filing has occurred.

4.9 Termination of Existing Agreements.

Effective upon the Closing, (i) any prior stockholder agreements, voting agreements, co-sale agreements, or agreements relating to rights of first offer, rights of first refusal or preemptive rights shall have been terminated and shall be of no further force and effect, and (ii) any prior registration rights agreements shall have been terminated and shall be of no further force and effect.

4.10 Supporting Documents. The Series E Investors at the Closing shall have received the following:

(i) a favorable opinion from appropriate counsel or counsels to the Company, dated as of the Closing Date, in the form reasonably satisfactory to Chengwei;

(ii) a certificate of incumbency executed by the Secretary of the Company (A) certifying the names, titles and signatures of the officers authorized to execute the Transaction Documents and all instruments to be delivered pursuant hereto and thereto and (B) further certifying that the M&AA delivered to the Series E Investors at the time of the execution of this Agreement has been validly adopted and has not been amended or modified.

10

4.11 Fees of Series E Investors’ Counsel and Consultants.

The Company shall have paid, in accordance with Section 14.1, the fees, expenses and disbursements of legal counsel to Chengwei.

4.12 Board of Directors.

As of the Closing, the authorized size of the Board shall be six, and the Board shall be comprised of Victor Wing Cheung Koo, George Leonard Baker, Jr., Eric Xun Li, Jonathan Zhu, and Nick Lawler, with one vacancy.

5. CONDITIONS PRECEDENT AND COVENANTS OF THE SERIES E INVESTORS

As of the Closing and for the purpose of the Closing, the obligations of the Company under Section 6 of this Agreement shall be conditional upon the fulfilment or waiver on or prior to the Closing of each of the following conditions; provided that the conditions and covenants of each of the Series E Investors shall be several and not joint and a failure by one Series E Investor to fulfil any condition or covenant shall not remove the Company’s obligations to any other Series E Investor, including, but not limited to, the Company’s obligation to go forward with the Closing with respect to any Series E Investor who has fulfilled its conditions and covenants:

5.1 Representations and Warranties.

The representations and warranties made by the Series E Investors shall be true, complete and accurate in all material respects on and as of the date of this Agreement and the date of the Closing with the same effect as though such representations and warranties had been made on and as of the date of the Closing.

5.2 Necessary Approvals.

The Series E Investors shall have obtained all necessary corporate or applicable approvals, consents and qualifications for the execution, delivery and the performance of their obligations in/or contemplated in this Agreement and the Shareholders’ Agreement.

5.3 Definitive Transaction Documents.

The Series E Investors shall have each duly executed and delivered, as applicable, this Agreement, the Shareholders’ Agreement and their respective schedules and exhibits hereto and thereto.

6. CLOSING

6.1 Subject to the fulfilment of the Conditions Precedent in Section 4 in full, or the waiver thereof by the relevant Parties hereto, the Closing shall, unless the Parties hereto agree otherwise, take place on the date hereof (the “Closing Date”) at the office of TransAsia Lawyers located at Suite 2218 China World Tower 1, Jianguomenwai Avenue, Beijing 100004, China.

11

6.2 All of the following matters shall be or have been transacted at the time of the Closing:

(a) the Company shall:

(i) have satisfied all the conditions listed in Section 4 hereof (unless waived in whole or in part by the applicable Series E Investor);

(ii) issue and allot as fully paid the Subscription Shares to the Series E Investors, each of which shall be free from all charges, liens, encumbrances, equities or other third party rights, claims or interests (other than those rights contained within the Shareholders’ Agreement), and shall procure that the Series E Investors be registered as holders of the Subscription Shares in the register of members of the Company;

(iii) deliver to the Series E Investors or their respective nominees the share certificate issued in the name of the Series E Investors for the Subscription Shares issued and allotted to the Series E Investors;

(iv) deliver to the Series E Investors a copy of the filed M&AA of the Company in a form and substance in compliance with this Agreement and the Shareholders’ Agreement;

(v) deliver to the Series E Investors certified true copies of the shareholders resolutions and Board resolutions approving:

(1) the adjustment of authorized share capital;

(2) the allotment and issuance of the Subscription Shares to the Series E Investors in accordance with the terms of this Agreement and the delivery of share certificates representing the Subscription Shares to the Series E Investors;

(3) the approval of the execution, delivery and performance of this Agreement and the Shareholders’ Agreement by the Company; and

(4) the adoption of the M&AA and the filing thereof.

(vi) take such actions and do such deeds as reasonably requested by the Series E Investors, which may include without limitation the delivery of any of the Transaction Documents in Sections 4.5 and 6.2 hereof.

(b) The Series E Investors shall:

(i) have satisfied all the conditions listed in Section 5 hereof (unless waived in whole or in part by the Company); and

(ii) wire the cash consideration for its Subscription Shares in the amount specified in Section 2 upon the Closing;

12

provided that the obligations of the Series E Investors are several and not joint and a failure by one Series E Investor to fulfil such obligations shall not affect the rights or obligations of any other Series E Investor.

7. WARRANTIES

7.1 The Warrantors jointly and severally represent and warrant to the Series E Investors that each of the Warranties (as set out in Schedule 3A) is true, complete, accurate and not misleading in all respects at the date of this Agreement and that (unless expressly provided to the contrary in the Warranties) if there is any interval of time between the execution of this Agreement and the Closing, the Warranties will continue to be true, complete and accurate in all material respects (unless qualified by “Material Adverse Effect” or expressly provided to the contrary in the Warranties, in which case they will be true, complete, accurate and not misleading in all respects) subsequent to the date of this Agreement up to and including the time of the Closing as if repeated on each such days with reference to the facts then existing and at each of the Closing Dates, save and except as disclosed in the Disclosure Schedule (Schedule 3B) and except for matters that reference a specific date.

7.2 Each of the Warranties shall be construed as a separate and independent Warrantor Warranty and, except where expressly provided to the contrary, shall not be limited or restricted by reference to or inference from the terms of any other Warrantor Warranty or any other terms of this Agreement.

7.3 The Series E Investors shall not be entitled to make any claim under or in respect of the Warranties under this Agreement with respect to matters disclosed in the Disclosure Schedule (Schedule 3B) to the extent so disclosed.

7.4 Except for the specific Warranties expressly made by the Warrantors in this Agreement or any certificate or schedule furnished at the Closing to the Series E Investors pursuant to this Agreement, (i) each Series E Investor acknowledges and agrees that no Warrantor is making any representation or warranty, expressed or implied, at law or in equity, with respect to the Company or the Company’s Subsidiaries, or any of the Company’s or its Subsidiaries’ respective business, assets, liabilities, operations, prospects, or condition (financial or otherwise), including with respect to merchantability or fitness for any particular purpose of any assets, the nature or extent of any liabilities, the prospects of their respective business, the effectiveness or the success of any operations, and (ii) each Series E Investor specifically disclaims that it is relying upon or has relied upon any such other representations or warranties, and acknowledges and agrees that the Warrantors have specifically disclaimed and do hereby specifically disclaim any such other representation or warranty made by any person. Each Series E Investor acknowledges and agrees that it will not assert any claim against the Company, the Company’s Subsidiaries, any officer, director, or shareholder of the foregoing, and any of their respective representatives, or hold the Company, the Company’s Subsidiaries, or any officer, director, or shareholder or any of their respective representatives liable, for any inaccuracies, misstatements or omissions with respect to information (other than in respect to the Warranties contained in this Agreement) furnished by the Company, its Subsidiaries, or any of their respective representatives concerning the Company, the Company’s Subsidiaries, or any of their respective affiliates except for such inaccuracies, misstatements or omissions arising from or related to fraud or wilful misconduct. The provisions of this Section 7, together with the limited remedies provided in Section 10 were specifically bargained-for between the Warrantors and the Series E Investors, and were taken into account by them in arriving at the Subscription Price and the other terms hereof. Each Series E Investor represents and warrants to the Company that such Series E Investor has conducted, to its satisfaction, its own independent investigation of the condition, operations and business of the Company and its Subsidiaries and that such Series E Investor has been provided access to and an opportunity to review any and all information regarding the Company and its Subsidiaries requested by such Series E Investors in order for such Series E Investor to make its own determination to proceed with the transactions contemplated by this Agreement and with the limited representations, warranties and remedies specifically bargained for herein.

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7.5 Except for fraud or willful misconduct, all Warranties in this Agreement, the Schedules, and the Disclosure Schedule shall expire on the first anniversary of the Closing Date; provided, however, that the Warranties set forth in Section 9 of this Agreement and in Sections 1, 2, 3, 6 and 16 of Schedule 3A shall survive the Closing Date indefinitely. All covenants and agreements of the Company contained in this Agreement will survive the Closing indefinitely (except as expressly limited in such covenant or agreement). Save and except as disclosed in this Agreement, the Schedules, or the Disclosure Schedule, the Warranties, covenants and obligations of the Company, and the rights and remedies that may be exercised by the Series E Investors, shall not be limited or otherwise affected by any investigation made by any of the Series E Investors or any of their representatives.

8. SERIES E INVESTOR WARRANTIES

8.1 Each of the Series E Investors hereby represents and warrants severally and not jointly to the Company that each of the Investor Warranties made by such Series E Investor (as set out in Schedule 4) is true, complete, accurate and not misleading in all material respects at the date of this Agreement and, for the purposes of the Closing, on the Closing Date.

8.2 Each of the Series E Investor Warranties shall be construed as a separate and independent Series E Investor Warranty and, except where expressly provided to the contrary, shall not be limited or restricted by reference to or inference from the terms of any other Series E Investor Warranty or any other terms of this Agreement.

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9. CERTAIN US TAX MATTERS

The Warrantors jointly and severally represent and warrant to the Series E Investors that:

9.1 Immediately after the Closing, the Company will not be a “Controlled Foreign Corporation” (“CFC”) as defined in the U.S. Internal Revenue Code of 1986, as amended (or any successor thereto) (the “Code”) with respect to the shares held by the Investor. In the event that the Company is determined in writing by internationally recognized counsel or accountants for a Series E Investor to be a CFC with respect to the shares held by such Series E Investor, the Company agrees (a) to use commercially reasonable efforts to avoid generating Subpart F Income (as defined in the Code) (“Subpart F Income”) and (b) to the extent permitted by law, to annually make dividend distributions to such Series E Investor in an amount equal to 50% of any income deemed distributed to the Investor that would have been deemed distributed to such Series E Investor pursuant to Section 951(a) of the Code had such Series E Investor been a “United States person” as such term is defined in Section 7701(a)(30) of the Code (or such lesser amount determined by the Investor in its sole discretion). No later than two (2) months following the end of each Company taxable year, the Company shall provide the following information to the Series E Investors: (i) the Company’s capitalization table as of the end of the last day of such taxable year and (ii) a report regarding the Company’s status as a CFC. In addition, the Company shall provide such Series E Investors with reasonable access to such other Company information as may be required by the Series E Investors to determine the Company’s status as a CFC, to determine whether the Investor or any of the Investor’s Partners is required to report its pro rata portion of the Company’s Subpart F Income on its United States federal income tax return, or to allow such Series E Investor or such Investor’s Partners to otherwise comply with applicable United States federal income tax laws. For purposes of this Section 9.1, (i) the term “Investor’s Partners” shall mean each of the Investor’s shareholders, partners, members or other equity holders and any direct or indirect equity owners of such entities and (ii) the “Company” shall mean the Company and any of its Subsidiaries.

9.2 The Company has never been, and, to the best of its knowledge after consultation with its tax advisors, will not be with respect to its taxable year during which the Closing occurs, a “passive foreign investment company” (“PFIC”) within the meaning of Section 1297 of the Code. The Company shall use its commercially reasonable efforts to avoid being a PFIC. The Company shall make due inquiry with its tax advisors on at least an annual basis regarding its status as a PFIC, and if the Company is informed by its tax advisors that it has become a PFIC, or that there is a likelihood of the Company being classified as a PFIC for any taxable year, the Company shall promptly notify the Series E Investors of such status or risk, as the case may be. In connection with a “Qualified Electing Fund” election made by any of an Investor’s Partners pursuant to Section 1295 of the Code or a “Protective Statement” filed by any of a Series E Investor’s Partners pursuant to Treasury Regulation Section 1.1295-3, as amended (or any successor thereto), the Company shall provide annual financial information to the Series E Investors in the form provided in the attached Exhibit 3 as soon as reasonably practicable following the end of each taxable year of the Company (but in no event later than ninety (90) days following the end of each such taxable year), and shall provide the Series E Investors with access to such other Company information as may be reasonably required for purposes of filing U.S. federal income tax returns in connection with such Qualified Electing Fund election or Protective Statement. In the event that a Series E Investor’s Partner has made a “Qualified Electing Fund” election and must include in its gross income for a particular taxable year its pro rata share of the Company’s earnings and profits pursuant to Section 1293 of the Code, the Company agrees to make a dividend distribution to the Investor (no later than ninety (90) days following the end of the Company’s taxable year or, if later, ninety (90) days after the Company is informed by such Series E Investor that such Investor’s Partner has been required to recognize such an income inclusion) in an amount equal to 50% of the amount that would be included by the Investor if the Investor were a “United States person” as such term is defined in Section 7701(a)(30) of the Code and had the Series E Investor made a valid and timely “Qualified Electing Fund” election which was applicable to such taxable year.

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9.3 The Company shall take such actions, including making an election to be treated as a corporation or refraining from making an election to be treated as a partnership, as may be required to ensure that at all times the Company is treated as corporation for United States federal income tax purposes.

9.4 The Company shall make due inquiry with its tax advisors (and shall cooperate with the Investor’s tax advisors with respect to such inquiry) on at least an annual basis regarding whether the Series E Investors’ or any such Investor’s Partner’s direct or indirect interest in the Company is subject to the reporting requirements of either or both of Sections 6038 and 6038B of the Code (and the Company shall duly inform the Investor of the results of such determination), and in the event that such Investor’s or any such Investor’s Partner’s direct or indirect interest in Company is determined by the Company’s tax advisors or the Investor’s tax advisors to be subject to the reporting requirements of either or both of Sections 6038 and 6038B, the Company agrees, upon a request from the Investor, to provide such information as may be necessary to fulfil such Investor’s or such Investor’s Partner’s obligations thereunder.

9.5 The Company hereby represents, warrants and acknowledges that (i) it has no plan to (and it has not engaged in any transactions to) complete the direct or indirect acquisition of substantially all of the properties held directly or indirectly by a domestic corporation or substantially all of the properties constituting a trade or business of a domestic partnership, and (ii) it is not a “surrogate foreign corporation” within the meaning of Section 7874(a)(2)(B) of the Code.

10. INDEMNIFICATION

10.1 From and after the Closing until the earlier of (i) the first anniversary of the Closing Date; or (ii) the consummation of a Qualified Public Offering (as defined in the M&AA), the Warrantors shall jointly and severally indemnify and hold harmless each of the Series E Investors against any and all losses, damages (but excluding any consequential, incidental, or punitive damages except to the extent such consequential, incidental or punitive damages arise from or in connection with third party claims, actions, suits or proceedings), liabilities, costs, claims, actions and expenses (including legal and accounting fees) or demands which may arise from any breach, default or failure by the Warrantors of the Warranties or any agreement or covenant of the Warrantors contained herein, or in connection with or arising from claims, actions, suits, proceedings or similar claims by any Person or entity (other than such Series E Investor) associated or relating to the execution, delivery and performance of this Agreement, any of the other Transaction Documents or the M&AA or the transactions contemplated hereby or thereby.

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10.2 Notwithstanding anything herein to the contrary, the Company shall have no liability for indemnification pursuant to this Section 10 or otherwise until the total liability for any breach, default, or failure (“Losses”) by the Company of the Warranties exceeds US$500,000 (the “Basket”), and then the Company shall indemnify such Indemnified Party for the amount of all of its Losses. Notwithstanding anything herein to the contrary, the maximum liability (the “Cap”) of the Warrantors for the Losses shall not exceed the total consideration paid by the Series E Investors for their Subscription Shares under this Agreement; provided, that if after six (6) months following the Closing Date, no claims have been made by the Series E Investors hereunder, the Cap shall be reduced to fifteen percent (15%) of the total consideration paid by the Series E Investors for their Subscription Shares under this Agreement.

10.3 To the extent any indemnifiable losses pursuant to this Section 10 are reflected as a reserve, liability or similar item on the audited financials of the Company, such losses to the extent so reflected shall not be subject to indemnification pursuant to this Section 10.

10.4 Except for fraud and wilful misconduct, the indemnity provided in this Section 10 shall be the sole and exclusive remedy of the Series E Investors in relation to any breach of any Warranties.

10.5 Notwithstanding anything herein to the contrary, no claim for indemnification hereunder shall be commenced without the affirmative written approval of the Series E Investors who subscribed for at least a majority of the Series E Preferred Shares purchased hereunder.

11. SPECIAL COVENANTS AFTER CLOSING

11.1 Use of Proceeds. The Company hereby covenants that it shall limit the use of the proceeds of the funds it receives upon the Closing as the consideration for the Subscription Shares for the purposes of capital expenditure, marketing, repayment of the debts and liabilities set forth on Schedule 5, and general corporate purposes. The Company shall not use the proceeds of the funds it receives upon the Closing as the consideration for the Subscription Shares, in whole or in part, for repurchase, redemption or cancellation of any securities held by any prior investors thereto, unless such use of funds is duly authorized by a Board resolution duly passed in accordance with the terms and provisions of the Shareholders’ Agreement and the M&AA.

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11.2 No Competition. Until the second anniversary of the Closing Date, none of the Series E Investors shall directly or indirectly, as a majority owner, controlling shareholder, consultant, or agent, own a controlling interest, manage, operate, control or participate in the management, operation or control of Tudou.com or 56.com, or any of their subsidiaries.

12. NOTICES

12.1 Any notice or other communication given or made under this Agreement shall be in writing.

12.2 Any such notice or other communication shall be addressed as provided in this Section 12 and, if so addressed, shall be deemed to have been duly given or made as follows:

(a) if sent by personal delivery, upon delivery at the address of the relevant Party;

(b) if sent by an internationally recognized carrier, three (3) Business Days after the date of posting; and

(c) if sent by facsimile, upon despatch to the facsimile number of the recipient, with the production of a transmission report by the machine from which the facsimile was sent which indicates that the facsimile was sent in its entirety to the facsimile number of the recipient.

12.3 The relevant address and facsimile number of each Party for the communication purposes of this Agreement, subject to Section 12.4, is set out on the signature pages hereof.

12.4 A Party may notify the other Parties to this Agreement of a change to its name, address or facsimile number for the purpose of this Section provided that such notification shall only be effective on:

(i) if sub-section (ii) does not apply, the date specified in the notification as the date on which the change is to take place; or

(ii) if no date is specified or the date specified is less than seven (7) Business Days after (and excluding) the date on which the notice is given, the date falling seven (7) Business Days after notice of any such change has been given.

13. CONFIDENTIALITY

13.1 Subject to Section 13.2, each Party shall treat as strictly confidential all information received or obtained as a result of entering into or performing this Agreement which relates to:

(i) the specific economic and financial provisions of this Agreement;

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(ii) the negotiations relating to this Agreement; and

(iii) the other Parties.

13.2 Each Party may disclose information which would otherwise be confidential if and to the extent:

(i) required by the law of any relevant jurisdiction;

(ii) required by existing contractual obligations and with the prior written consent of the other Parties hereto (which consent shall not be unreasonably withheld or delayed);

(iii) required by any securities exchange or regulatory or governmental body to which such Party or the Company is subject or submits, wherever situated;

(iv) disclosed to the professional advisors, auditors and bankers of each Party or of the Company for the purpose of this Agreement;

(v) if a Party is a fund, then (a) to its fund manager and its professional advisors, auditors, bankers, partners, members, stockholders and equity holders for the purpose of this Agreement, and (b) if it is required for fund and inter-fund reporting (as applicable), for such reporting only;

(vi) the information has come into the public domain through no fault of that Party (as proven by such Party);

(vii) such disclosure is made in connection with the enforcement of any right or remedy relating to this Agreement or the Transaction Documents or the transactions contemplated hereby or thereby;

(viii) such information was independently developed by such Party without reference to confidential information obtained hereunder (as proven by such Party);

(ix) such information was obtained from a third party not, to the knowledge of and as proven by the receiving party, in breach of any non-disclosure obligations to the disclosing party;

(x) permitted pursuant to the terms of any written agreement between such Party and the disclosing Party; or

(vii) the disclosing Party has given prior written approval to the disclosure;

PROVIDED THAT, unless prohibited by any relevant law, governmental or regulatory bodies or any securities exchange, any order or decree, any such information disclosed pursuant to sub-sections (i) or (iii) above shall, if practical, be disclosed only after consultation with and notice to the other Parties to which the information relates.

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14. COSTS AND EXPENSES

14.1 The Parties shall bear the reasonable legal fees, costs and expenses respectively incurred thereby in relation to the negotiations, preparations, execution and performance of this Agreement and all other transactions incidental to and/or contemplated by this Agreement, provided that, upon the Closing, the Company will pay at the Closing the out-of-pocket expenses (including legal fees) up to a maximum of US$50,000, upon receipt of invoices therefor, incurred by Chengwei in connection with the transactions contemplated hereby (an estimate of the fees and expenses of such counsel may be paid by check delivered or wire transfer to such counsel at the Closing by Chengwei the amount of such check or wire transfer being deducted from the aggregate amount to be paid by Chengwei at the Closing for the shares of Series E Preferred Stock to be purchased by them hereunder).

14.2 Any duty or tax arising on the issue and allotment of any of the Subscription Shares to the Series E Investors shall be borne solely by the Company.

15. MISCELLANEOUS

15.1 Surviving Provisions.

Notwithstanding anything to the contrary under this Agreement, Sections 1, 9, 10, 11, 12, 13, 14, 15 and 16 shall remain in full force and effect after, and shall survive notwithstanding, the Closing hereunder.

15.2 Successors and Assigns.

(i) This Agreement is personal to the Parties hereto and save as expressly provided herein, none of them may assign, mortgage, charge or sub-license any of their respective rights herein, or sub-contract or otherwise delegate any of its obligations herein, except with the prior written consent of the other Parties hereto.

(ii) Subject to sub-section (i) above, this Agreement shall be binding on and inure for the benefit of the successors, permitted assigns and personal representatives (as the case may be) of each of the Parties hereto.

(iii) Notwithstanding the above, it is agreed that the Series E Investors may transfer and assign all the rights and obligations hereunder to its Affiliates in its sole discretion upon written notice to the other Parties.

15.3 Cumulative Rights.

Unless otherwise provided in this Agreement, any remedy conferred on any Party hereto for breach of this Agreement shall be in addition and without prejudice to all other rights and remedies available to it.

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15.4 Entire Agreement and Variation.

This Agreement shall supersede all and any previous agreements, understandings or arrangements (if any) among the Parties hereto or any of them in relation to the subject matter hereof and all or any such previous agreements, understandings or arrangements (if any) shall cease to be of any force or effect from the date hereof. This Agreement constitutes the whole agreement among the Parties hereto or any of them in relation to the subject matter hereof (no Party having relied on any representation, warranty or undertaking made by any other Party which is not a term of this Agreement) and no variation to this Agreement shall be effective unless made in writing and signed by each of the Parties hereto. The sole and exclusive remedies for any breach of the terms and provisions of this Agreement (including any representations and warranties set forth herein) shall be those remedies available at law or in equity for breach of contract only (as such contract remedies may be further limited or excluded pursuant to the express terms of this Agreement), except for any breach arising out of or related to fraud or wilful misconduct; and the Parties hereto hereby waive and release any and all tort claims and causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement (including any tort claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement), except for any tort claim or cause of action that may be based upon, arise from or relate to fraud or wilful misconduct.

15.5 Further Assurance.

Each of the Parties hereto undertakes severally and not jointly with each of the other Parties that it shall do, or shall procure to be done, all such acts and things and shall execute, or shall procure to be executed, all such documents as may be necessary or appropriate to implement the provisions of this Agreement or otherwise to give full legal force and effect thereof.

15.6 Severability.

The Parties hereto intended that the provisions of this Agreement shall be enforced to the maximum extent permissible under the laws applied in each jurisdiction in which enforcement of any provisions of this Agreement is sought. If any particular provision or part of this Agreement shall be held to be invalid or unenforceable, this Agreement shall be deemed to be amended by the deletion of the provision or part held to be invalid or unenforceable or, to the extent permissible by the applicable laws of the relevant jurisdiction in which such enforcement is sought, such provision or part shall be deemed to be varied in such a way as to achieve most closely the purpose of the original provision or part in a manner which is valid and enforceable, provided that for the avoidance of doubt, such amendments shall apply only with respect to the operation of this Agreement in the particular jurisdiction in which the decision as to invalidity or unenforceability is made.

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15.7 Non-Waiver.

No delay or omission on the part of any Party hereto in exercising any right, power or privilege shall operate to impair such right, power or privilege or be construed as a waiver by such Party of the same and no single or partial exercise or non-exercise or delay in exercising any right, power or privilege by any Party hereto shall in any circumstances preclude any other or further exercise by such Party of such right, power or privilege or the exercise of any other right, power or privilege by such Party.

15.8 Counterparts.

This Agreement may be executed in counterparts and by different Parties hereto on separate copies or counterparts and which taken together shall constitute one and the same agreement. The facsimile transmissions of any executed original document (including without limitation, any page of an original document on which an original signature appears) and/or retransmission of any such facsimile transmission shall be deemed to be the same as the delivery of an executed original. At the request of any Party hereto, the other Parties hereto shall confirm facsimile transmissions by executing duplicate original documents and delivering the same to the requesting Party or Parties.

15.9 Time of Essence.

Time shall be of essence in this Agreement and this Section shall apply to any extension of time in relation to this Agreement as may be agreed by the Parties hereto from time to time.

15.10 Shareholders’ Agreement.

The Parties hereto shall upon execution of this Agreement simultaneously enter into the Shareholders’ Agreement in the form and substance attached hereto as Exhibit 1.

15.11 No Third Party Liability.

This Agreement may only be enforced against the named parties hereto. All claims or cause of action (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement (including any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement), may be made only against the entities that are expressly identified as parties hereto; and no officer, director, shareholder, employee, representative or affiliate of any party hereto (including any person negotiating or executing this Agreement on behalf of a party hereto) shall have any liability or obligation with respect to this Agreement or with respect to any claim or cause of action (whether in contract or tort) that may arise out of or be related to this Agreement, or the negotiation, execution or performance of this Agreement (including a representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement).

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15.12 Exculpation Among Series E Investors.

Each Series E Investor acknowledges that it is not relying upon any person, firm or corporation, other than the Company and its officers and directors (acting solely in their capacities as agents of the Company), in making its investment or decision to invest in the Company. Each Series E Investor agrees that no Series E Investor nor the respective controlling persons, officers, directors, partners, agents, or employees of any Series E Investor shall be liable to any other Series E Investor for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Subscription Shares.

15.13 Rights of Series E Investors.

Each Series E Investor, in its sole and absolute discretion, may exercise or refrain from exercising any rights or privileges that such Series E Investor may have pursuant to this Agreement, the other Transaction Documents, or at law or in equity, and such Series E Investor shall not incur or be subject to any liability or obligation to any other Series E Investor or holder of Series E Preferred Shares, any other shareholder or securityholder of the Company or any other person, by reason of exercising or refraining from exercising any such rights or privileges, provided, however, that this provision shall not relieve any Investor of their voting obligations pursuant to the Shareholders’ Agreement.

15.14 No Commitment for Additional Financing.

The Company acknowledges and agrees that no Series E Investor has made any representation, undertaking, commitment or agreement to provide or assist the Company in obtaining any financing, investment or other assistance, other than the purchase of the Series E Preferred Shares as set forth herein and subject to the Conditions Precedent. In addition, the Company acknowledges and agrees that (a) no statements, whether written or oral, made by any Series E Investor or its representatives on or prior to the date hereof shall have created an obligation, commitment or agreement to provide or assist the Company in obtaining any financing or investment, (b) the Company shall not rely on any such statement by any Series E Investor or its representatives and (c) an obligation, commitment or agreement to provide or assist the Company in obtaining any financing or investment may only be created by a written agreement, signed by such Series E Investor and the Company, setting forth the terms and conditions of such financing or investment and stating that the parties intend for such writing to be a binding obligation or agreement. Absent a written agreement to the contrary, signed by such Series E Investor, such Series E Investor shall have the right in its sole and absolute discretion to refuse or decline to participate in any other financing of or investment in the Company, and shall have no obligation to assist or cooperate with the Company in obtaining any financing, investment or other assistance.

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16. DISPUTE RESOLUTION

16.1 Resolution by Consultation.

Any dispute, controversy or claim arising out of or relating to this Agreement, or the interpretation, breach, termination or validity hereof, shall be resolved through consultation. Such consultation shall begin immediately after one Party hereto has delivered to the other Party hereto a written request for such consultation. If within thirty (30) days following the date on which such notice is given the dispute cannot be resolved, the dispute shall be submitted to arbitration according to Section 16.2 below upon the request of either Party with notice to the other(s).

16.2 Arbitration Venue and Arbitrators.

The arbitration shall be conducted in Hong Kong, under the auspices of the Hong Kong International Arbitration Centre (“HKIAC”) in accordance with the UNCITRAL Arbitration Rules (the “UNCITRAL Rules”) then in effect. The arbitration tribunal shall consist of three arbitrators to be appointed according to the UNCITRAL Rules. The language of the arbitration shall be English.

16.3 Effect of Award.

The award of the arbitration tribunal shall be final and binding upon the disputing parties and, in the case where the subdued party does not perform the award, the prevailing party may apply to a court of competent jurisdiction for enforcement of such award.

16.4 Applicable Law.

The arbitrators shall decide any dispute submitted by the Parties to the arbitration strictly in accordance with the substantive law of New York State and shall not apply any other substantive law.

16.5 Information Disclosure.

Each Party hereto shall co-operate with the other(s) in making full disclosure of and providing complete access to all information and documents requested by the other(s) in connection with such arbitration proceedings, subject only to any confidentiality obligations binding on such Party.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

Company:
For and on behalf of:
Youku.com Inc.
By:	/s/ Victor Wing Cheung Koo
Name:	Victor Wing Cheung KOO
Position:	Director and Chief Executive Officer
Address:	5th Floor, SinoSteel Plaza 8 Haidian Street, Haidian District Beijing 100080
Attn:	Dele LIU, Senior Vice President and Chief Financial Officer
Fax:	(8610) -59708818

[Series E Investors Signature Pages Follow]

[Company Signature Page to Share Purchase Agreement]

Series E Investor Signature Pages:
For and on behalf of:
CHENGWEI PARTNERS, L.P.
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
Address:	c/o Chengwei Ventures 58 West Portal Avenue #146 San Francisco, California 94127
CHENGWEI VENTURES EVERGREEN FUND, L.P.
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
Address:	c/o Chengwei Ventures 58 West Portal Avenue #146 San Francisco, California 94127
CHENGWEI VENTURES EVERGREEN ADVISORS FUND, LLC
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
Address:	c/o Chengwei Ventures 58 West Portal Avenue #146 San Francisco, California 94127

[Series E Investors Signature Page to Share Purchase Agreement]

MAVERICK FUND PRIVATE INVESTMENTS, LTD.
By:	Maverick Capital, Ltd., under Power of Attorney effective as of December 30, 2008
	By:	/s/ John T. McCafferty
		John T. McCafferty
		Limited Partner & General Counsel
Address:		300 Crescent Court 18th Floor
		Dallas, Texas 75201
Fax:		(214) 880-4020
MAVERICK USA II, CORP.
By:	Maverick Capital, Ltd., its Attorney-in-Fact
	By:	/s/ John T. McCafferty
		John T. McCafferty
		Limited Partner & General Counsel
Address:		300 Crescent Court 18th Floor
		Dallas, Texas 75201
Fax:		(214) 880-4020

[Series E Investors Signature Page to Share Purchase Agreement]

SUTTER HILL VENTURES,
a California limited partnership
Signature:	/s/ G. Leonard Baker, Jr.
Name:	G. LEONARD BAKER, Jr.
Its:	Managing Director of its General Partner
Address:	755 Page Mill Road, Suite A-200
	Palo Alto, CA 94304-1005
ANVEST, L.P.
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	David L. Anderson
Position:	General Partner
Address:	755 Page Road, Suite A-200, Palo Alto, CA 94394-1005, USA
Attention:	G. Leonard Baker
Fax:	(650) 858-1854
SAUNDERS HOLDINGS, L.P.
Signature:	/s/ G. Leonard Baker, Jr.
Name:	G. Leonard Baker, Jr.
Position:	General Partner
Address:	755 Page Road, Suite A-200, Palo Alto, CA 94394-1005, USA
Attention:	G. Leonard Baker
Fax:	(650) 858-1854
ROOSTER PARTNERS, LP
Signature:	/s/ Robert Yin (Attorney-in-fact)
Name:	Tench Coxe, Trustee of The Coxe Revocable Trust U/A/D 4/23/98
Position:	General Partner
Address:	755 Page Mill Road, Suite A-200
	Palo Alto, CA 94304-1005

[Series E Investors Signature Page to Share Purchase Agreement]

GREGORY P. SANDS
Signature:	/s/ Robert Yin (Attorney-in-fact)
Address:	755 Page Road, Suite A-200, Palo Alto, CA 94394-1005, USA
Fax:	(650) 858-1854
JAMES N. WHITE
Signature:	/s/ Robert Yin (Attorney-in-fact)
Address:	755 Page Road, Suite A-200, Palo Alto, CA 94394-1005, USA
Fax:	(650) 858-1854
JEFFREY W. BIRD
Signature:	/s/ Robert Yin (Attorney-in-fact)
Address:	755 Page Road, Suite A-200, Palo Alto, CA 94394-1005, USA
Fax:	(650) 858-1854
WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO SHERRYL W. CASELLA
Signature:	/s/ Vicki M. Bandel
	Assisstant Vice President
	Trust Officer
Address:	Wells Fargo Bank, N.A., 600 California Street 12th Floor, MAC A0193-120, San Francisco, CA 94108
Attention:	Vicki Bandel
Fax:	(415) 975-7539
WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO DAVID L. ANDERSON
Signature:	/s/ Vicki M. Bandel
	Assisstant Vice President
	Trust Officer
Address:	Wells Fargo Bank, N.A., 600 California Street 12th Floor, MAC A0193-120, San Francisco, CA 94108
Attention:	Vicki Bandel
Fax:	(415) 975-7539

[Series E Investors Signature Page to Share Purchase Agreement]

WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO G. LEONARD BAKER, JR.
Signature:	/s/ Vicki M. Bandel
	Assisstant Vice President
	Trust Officer
Address:	Wells Fargo Bank, N.A., 600 California Street 12th Floor, MAC A0193-120, San Francisco, CA 94108
Attention:	Vicki Bandel
Fax:	(415) 975-7539
WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO WILLIAM H. YOUNGER, JR.
Signature:	/s/ Vicki M. Bandel
	Assisstant Vice President
	Trust Officer
Address:	Wells Fargo Bank, N.A., 600 California Street 12th Floor, MAC A0193-120, San Francisco, CA 94108
Attention:	Vicki Bandel
Fax:	(415) 975-7539
WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO TENCH COXE
Signature:	/s/ Vicki M. Bandel
	Assisstant Vice President
	Trust Officer
Address:	Wells Fargo Bank, N.A., 600 California Street 12th Floor, MAC A0193-120, San Francisco, CA 94108
Attention:	Vicki Bandel
Fax:	(415) 975-7539

[Series E Investors Signature Pages to Share Purchase Agreement]

WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO ANDREW T. SHEEHAN
Signature:	/s/ Vicki M. Bandel
	Assisstant Vice President
	Trust Officer
Address:	Wells Fargo Bank, N.A., 600 California Street 12th Floor, MAC A0193-120, San Francisco, CA 94108
Attention:	Vicki Bandel
Fax:	(415) 975-7539
WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO DAVID E. SWEET (ROLLOVER)
Signature:	/s/ Vicki M. Bandel
	Assisstant Vice President
	Trust Officer
Address:	Wells Fargo Bank, N.A., 600 California Street 12th Floor, MAC A0193-120, San Francisco, CA 94108
Attention:	Vicki Bandel
Fax:	(415) 975-7539
WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO LYNNE B. GRAW
Signature:	/s/ Vicki M. Bandel
	Assisstant Vice President
	Trust Officer
Address:	Wells Fargo Bank, N.A., 600 California Street 12th Floor, MAC A0193-120, San Francisco, CA 94108
Attention:	Vicki Bandel
Fax:	(415) 975-7539
WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO DIANE J. NAAR
Signature:	/s/ Vicki M. Bandel
	Assisstant Vice President
	Trust Officer
Address:	Wells Fargo Bank, N.A., 600 California Street 12th Floor, MAC A0193-120, San Francisco, CA 94108
Attention:	Vicki Bandel
Fax:	(415) 975-7539

[Series E Investors Signature Pages to Share Purchase Agreement]

WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO YU-YING CHEN
Signature:	/s/ Vicki M. Bandel
	Assisstant Vice President
	Trust Officer
Address:	Wells Fargo Bank, N.A., 600 California Street 12th Floor, MAC A0193-120, San Francisco, CA 94108
Attention:	Vicki Bandel
Fax:	(415) 975-7539
WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO PATRICIA TOM (ROLLOVER)
Signature:	/s/ Vicki M. Bandel
	Assisstant Vice President
	Trust Officer
Address:	Wells Fargo Bank, N.A., 600 California Street 12th Floor, MAC A0193-120, San Francisco, CA 94108
Attention:	Vicki Bandel
Fax:	(415) 975-7539
WELLS FARGO BANK, N.A. FBO SHV PROFIT SHARING PLAN FBO ROBERT YIN
Signature:	/s/ Vicki M. Bandel
	Assisstant Vice President
	Trust Officer
Address:	Wells Fargo Bank, N.A., 600 California Street 12th Floor, MAC A0193-120, San Francisco, CA 94108
Attention:	Vicki Bandel
Fax:	(415) 975-7539

[Series E Investors Signature Pages to Share Purchase Agreement]

BROOKSIDE CAPITAL PARTNERS FUND, L.P.
By:
Its:
Signature:	/s/ Mark Moore
Name:	MARK MOORE
Its:	Managing Director
Address:	111 Huntington Avenue Boston, MA 02199 United States of America

[Series E Investors Signature Pages to Share Purchase Agreement]

THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY (DAPER1)
Signed By:	/s/ Martina S. Poquet
Name:	Martina Poquet
Its:	Managing Director - Separate Investments
Address:	2770 Sand Hill Road Menlo Park, CA 94025
THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY (SBST)
Signed By:	/s/ Martina S. Poquet
Name:	Martina Poquet
Its:	Managing Director - Separate Investments
Address:	2770 Sand Hill Road Menlo Park, CA 94025

[Series E Investors Signature Pages to Share Purchase Agreement]

EX-4.6

Exhibit 4.6

EXECUTION VERSION

Dated 9 September 2010

SHARE PURCHASE AGREEMENT

Regarding Series F Preferred Shares in

Youku.com Inc.

(a private company limited by shares incorporated in the Cayman Islands)

TABLE OF CONTENTS

1.	INTERPRETATION	2
2.	SUBSCRIPTION FOR SERIES F PREFERRED SHARES	9
3.	CONDITIONS PRECEDENT AND COVENANTS OF THE COMPANY	9
4.	CONDITIONS PRECEDENT AND COVENANTS OF THE SERIES F INVESTORS	12
5.	CLOSING	13
6.	WARRANTIES	15
7.	SERIES F INVESTOR WARRANTIES	16
8.	CERTAIN US TAX MATTERS	17
9.	INDEMNIFICATION	19
10.	SPECIAL COVENANTS AFTER CLOSING	20
11.	NOTICES	20
12.	CONFIDENTIALITY	21
13.	COSTS AND EXPENSES	23
14.	MISCELLANEOUS	23
15.	DISPUTE RESOLUTION	27

Youku.com Inc.

(a private company limited by shares incorporated in the Cayman Islands)

Series F Preferred Share Purchase Agreement

THIS SHARE PURCHASE AGREEMENT (this “Agreement”) is made on this 9^th day of September, 2010.

BY AND AMONG

1. Youku.com Inc., a Cayman Islands exempted company organized and existing under the laws of the Cayman Islands, with its registered office at Scotia Centre, 4^th Floor, P.O. Box 2804, George Town, Grand Cayman, Cayman Islands (the “Company”); and

2. The investors (each a “Series F Investor” and, collectively, the “Series F Investors”) set forth on the Series F Investor Signature Pages to this Agreement. For purposes of clarity, to the extent an investor set forth on the Series F Investor Signature Pages is a fund for whom an investment advisor has signed on behalf of, the “Series F Investor” is the fund set forth on the signature pages and not any investment adviser signing on behalf of such fund.

The Company and the Series F Investors may hereinafter collectively be referred to as “Parties” and respectively referred to as “Party”.

WHEREAS:

(A) The Company is a private company incorporated in the Cayman Islands with capitalization as before and after the Closing (as defined below in Section 2.1.1) set out in Schedule 1 attached hereto.

(B) By a Board resolution dated the date hereof, 100,465,709 of the Company’s Class F Convertible Preferred Shares, US$0.00001 par value (the “Series F Preferred Shares”) shall be issued and allotted to the Series F Investors pursuant to the terms hereof.

(C) Simultaneously with the execution of this Agreement, the Parties hereto and the holders of the Company’s Series A Preferred Shares (the “Series A Preferred Shareholders”), the holders of the Company’s Series B-1 Preferred Shares (the “Series B-1 Preferred Shareholders”), the holders of the Company’s Series B-2 Preferred Shares (the “Series B-2 Preferred Shareholders”, and together with the Series B-1 Preferred Shareholders, the “Series B Shareholders”), the holders of the Company’s Series C Preferred Shares (the “Series C Preferred Shareholders”), the holders of the Company’s Series D Preferred Shares (the “Series D Preferred Shareholders”), the holders of the Company’s Series E Preferred Shares (the “Series E Preferred Shareholders”) and the Series F Investors are entering into an Amended and Restated Shareholders’ Agreement of even date herewith (the “Shareholders’ Agreement”). A copy of the Shareholders’ Agreement is annexed hereto as Exhibit 1.

1. INTERPRETATION

1.1 In this Agreement and the Schedules hereto, unless the context requires or provides otherwise:

“Ads Company”	means JiaHeYi Advertising (Beijing) Co., Ltd, a limited liability company established and existing under the laws of the People’s Republic of China, with its registered office at Room 602A, Dongsheng Building, 8 Zhongguancun Dong Lu, Haidian District, Beijing 100083, China;
“Affiliate”	with regard to a given person, means a person that controls, is controlled by or is under common control with the given person. For purposes of this Agreement, except as otherwise expressly provided, when used with respect to any person, “control” means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “affiliated”, “controlling and “controlled” have meanings correlative to the foregoing. For the purposes of Section 8, the term Affiliate shall only include Affiliates that directly own Preferred Shares as of the date of this Agreement;
“Agreement”	has the meaning as set forth in the recitals;
“Board”	means the board of directors of the Company;
“Business Day”	means a day (other than a Saturday or Sunday) on which licensed banks are open for general banking business in the PRC and Hong Kong;
“Chief Executive Officer”	refers to Victor Wing Cheung Koo, the Company’s current chief executive officer;
“Chief Financial Officer”	refers to Dele Liu, the Company’s current chief financial officer;
“Company”	has the meaning as set forth in the recitals;
“Closing”	subject to the fulfillment of the Conditions Precedent in Sections 3 and 4, means the closing of the transactions contemplated hereby;
“Closing Date”	means the date on which the Closing is to take place pursuant to Section 5;

2

“Conditions Precedent”	means the conditions precedent to each of the Closings as set out in Sections 3 and 4;
“Condition of the Company”	means the assets, business, properties, operations or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole;
“Disclosure Schedule”	means Schedule 3B;
“Employee(s)”	shall mean the employees, consultants, directors, and officers of the Company and its Subsidiaries;
“Equity Pledge Agreements”	means the equity pledge agreements whereby (i) the equity holders of Ads Company pledge their equity in favour of 1Verge Internet Technology Co., Ltd. and (ii) the equity holders of ICP Co pledge their equity in favour of 1Verge Internet Technology Co., Ltd.
“ESOP”	means the Company’s 2006 Employee Share Option Scheme, as amended and in effect on the date hereof;
“Exhibit”	means an exhibit attached to this Agreement;
“Foreign Official”	means an employee of a Governmental Authority, a foreign official, a member of a foreign political party, a foreign political candidate, an officer of a public international organization, or an officer or employee of a PRC state-owned enterprise, where the term “foreign” has the meaning ascribed to it under the United States Foreign Corrupt Practices Act;
“Governmental Authority”	means the government of any nation, state, city, locality or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing;
“Hong Kong”	means the Hong Kong Special Administrative Region of the PRC;
“ICP Co”	1Verge Information Technology (Beijing) Co., Ltd., a limited liability company established and existing under the laws of the People’s Republic of China, with its registered office at 5th Floor, SinoSteel Plaza 8 Haidian Street, Haidian District Beijing 100080, China;

3

“Intellectual Property”	means (i) any and all registered or unregistered inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereon and any and all patents, patent applications and patent disclosures together with all reissuances, continuations, continuations-in-part, revisions, extensions and reexaminations thereof, (ii) all trademarks, service marks, trade dress, logos, domain names, trade names and corporate names, together with all translations, adaptations, derivations and combinations thereof and including all goodwill associated therewith, and all applications, registrations and renewals in connection therewith, (iii) all copyrightable works, all copyrights and all applications, registrations and renewals in connection therewith, (iv) all trade secrets and confidential business information (including, without limitation, ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals), (v) all computer software (including, without limitation, data and related documentation and except for any commercial “shrink-wrapped” software) and source codes, (vi) all other proprietary rights, and (vii) all licenses or agreements in connection with the foregoing;
“Jet Brilliant Beijing”	Beijing Jet Brilliant Advertising Co., Ltd., a limited liability company established and existing under the laws of the People’s Republic of China, with its registered office at Suite 1175F, 11th Floor, Tower A, Gateway Plaza, No.18 Xia Guang Li, North Road, Third Ring, Chaoyang District, Beijing, China;
“Knowledge”	means, together with words of similar meaning, with respect to the Company or its Subsidiaries, the actual knowledge after reasonable and due investigation, of the Company’s Chief Executive Officer or Chief Financial Officer;
“M&AA”	means the amended and restated memorandum and articles of association adopted pursuant to a shareholders special resolution of the Company dated the same date hereof, the form of which is attached hereto as Exhibit 2;

4

“Material Adverse Effect”	means any (i) adverse effect on the issuance or validity of the Subscription Shares or the transactions contemplated hereby or on the enforceability or validity, in any material respect, of the M&AA or on the ability of the Company to perform its obligations under this Agreement or the other Transaction Documents, or (ii) material adverse effect on the condition (financial or otherwise), properties, assets, liabilities, business, or operations of the Company or its Subsidiaries taken as a whole;
“Ordinary Shares”	means the ordinary shares of a par value of US$0.00001 each in the share capital of the Company;
“Party” or “Parties”	has the meaning as set forth in the recitals;
“PRC”	means the People’s Republic of China, which, for the purposes of this Agreement, shall exclude the Special Administrative Regions of Hong Kong and Macau and Taiwan;
“PRC Companies”	means the Ads Company, ICP Co and Jet Brilliant Beijing;
“Preferred Shares”	means the Series A Preferred Shares, the Series B Preferred Shares, the Series C Preferred Shares, the Series D Preferred Shares, the Series E Preferred Shares and the Series F Preferred Shares;
“Schedule”	means a schedule attached to this Agreement;
“Section”	means a section in this Agreement;
“Securities Act”	means the United States Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder;
“Series A Preferred Shareholders”	has the meaning as set forth in the recitals;
“Series A Preferred Shares”	means the Series A Preferred Shares of the Company of a par value of US$0.00001 each;
“Series B Preferred Shares”	means the Series B-1 Preferred Shares and the Series B-2 Preferred Shares;

5

“Series B Preferred Shareholders”	has the meaning as set forth in the recitals;
“Series B-1 Preferred Shares”	means the Series B-1 Preferred Shares of the Company of a par value of US$0.00001 each;
“Series B-2 Preferred Shares”	means the Series B-2 Preferred Shares of the Company of a par value of US$0.00001 each;
“Series C Preferred Shareholders”	has the meaning as set forth in the recitals;
“Series C Preferred Shares”	means the Series C Preferred Shares of the Company of a par value of US$0.00001 each;
“Series D Preferred Shareholders”	has the meaning as set forth in the recitals;
“Series D Preferred Shares”	means the Series D Preferred Shares of the Company of a par value of US$0.00001 each;
“Series E Preferred Shareholders”	has the meaning as set forth in the recitals;
“Series E Preferred Shares”	means the Series E Preferred Shares of the Company of a par value of US$0.00001 each;
“Series F Investors”	has the meaning set forth in the Preamble;
“Series F Investors Warranties”	means the representations and warranties made by the Series F Investors pursuant to this Agreement as set out in Schedule 4 and the term “Series F Investor Warranty” shall be construed accordingly;
“Series F Preferred Shares”	has the meaning set forth in the recitals;
“Shareholder”	means any holder of a share in the share capital of the Company;
“Shareholders’ Agreement”	has the meaning set forth in the recitals;
“Share”	has the meaning set forth in the recitals;
“Subscription”	means the subscription by the Series F Investors for the Subscription Shares in accordance with the terms and conditions of this Agreement;

6

“Subscription Price”	means the price at which Subscription Shares are subscribed hereunder, namely US$0.49768225 per share;
“Subscription Shares”	has the meaning set forth in Section 2.1.1 hereof;
“Subsidiaries”	means the PRC Companies, 1Verge Internet Technology (Beijing) Co., Ltd., a limited liability company established and existing under the laws of the Republic of China, with its registered office at 5/F, SinoSteel Plaza, 8 Haidian Street, Beijing 100080, China and Jet Brilliant Limited, a limited liability company established and existing under the laws of Hong Kong, with its registered office at Room 601 6/F, Yue Xiu Building 160-174 Lockhart Road, Wanchai, Hong Kong, Hong Kong;
“Transaction Documents”	has the meaning set forth in Section 3.5 hereof;
“United States Dollars” and “US$”	means the lawful currency of the USA;
“UNCITRAL”	means the United Nations Commission on International Trade Law;
“UNCITRAL Rules”	means the applicable arbitration rules of the United Nations Commission on International Trade Law;
“USA”	means the United States of America;
“Warranties”	means the representations and warranties made by the Warrantors pursuant to this Agreement as set out in Schedule 3A;
“Warrantors”	means the Company and all the Subsidiaries of the Company; and

7

“Warrantor Intellectual Property” means all Intellectual Property which is used in connection with the business of the Warrantors and all Intellectual Property owned by the Warrantors, provided that any Intellectual Property that is licensed by the Warrantors shall be included within the meaning of Warrantor Intellectual Property only within the scope of use by the applicable Warrantor or in connection with such Warrantor’s business. Warrantor Intellectual Property includes, but shall not be limited to, (i) the trademark registrations of “ ” and “ youku ” in class 41 in the People’s Republic of China, (ii) the trademark applications of “ youku.com,” “i ” and “iKu,” and (iii) domain name registrations such as youku.com, youku.com.cn, yogoo.net and yogoo.com.

1.2 In this Agreement, unless otherwise specified:

(i) references to Sections, sub-sections, paragraphs, sub-paragraphs, Schedules and Exhibits are to Sections, sub-sections, paragraphs, sub-paragraphs of, Schedules and Exhibits to this Agreement;

(ii) a reference to any statute or statutory provision shall be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or re-enacted;

(iii) references to a “company” shall be construed so as to include any company, corporation or other corporate body, wherever and however incorporated or established;

(iv) references to a “person” shall be construed so as to include any individual, firm, company, government, state or agency of a state or any joint venture, association or partnership (whether or not having separate legal personality);

(v) words imparting the singular shall include the plural and vice versa, words imparting one gender shall include all genders, and the term “including” means “including without limitation”;

(vi) references to writing shall include any communication made by letter, facsimile transmission, electronic mail and any other mode of reproducing words in a legible and non-transitory form;

(vii) references to times of day are to Beijing time;

(viii) headings to Sections, Schedules and Exhibits are for convenience of reference only and shall not affect the interpretation of this Agreement; and

8

(ix) the Schedules and Exhibits shall form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement, and any reference to this Agreement shall include the Schedules and Exhibits.

2. SUBSCRIPTION FOR SERIES F PREFERRED SHARES

2.1 Subscription for Series F Preferred Shares.

2.1.1 On the terms and subject to the conditions set out in this Agreement and subject to the satisfaction or waiver of the Conditions Precedent in Section 3, the Series F Investors shall hereby subscribe for and the Company shall at the closing of the Series F Preferred Shares funding transaction contemplated hereby (the “Closing”) allot and issue to the Series F Investors an aggregate of 100,465,709 Series F Preferred Shares (the “Subscription Shares”) for a total consideration of US$49,999,999.93 at a subscription price of US$0.49768225 per share (the “Subscription Price”) which Series F Preferred Shares shall carry the rights, interests, preferences and privileges under the Shareholders’ Agreement and the M&AA. Notwithstanding anything to the contrary in this Agreement, the Closing shall occur within ten (10) days of the date hereof.

2.1.2 Each Series F Investor shall at the Closing pay in full the amount for all the Subscription Shares allotted to such Series F Investor by wire transfer of immediately available funds into the bank account designated by the Company, as the consideration for the Subscription Shares. The allocation of Series F Preferred Shares at the Closing shall be in accordance with Schedule 2A attached hereto. Each of the Series F Investors’ obligation to fund its subscription for Series F Preferred Shares shall be several but not joint with respect to the Series F Preferred Shares that each has been allocated. A failure by any of the Series F Investors to fund its subscription shall not impair the rights of the rest of the Series F Investors or prevent the Closing with respect to the subscriptions of any other Series F Investor who has fully funded its subscription.

3. CONDITIONS PRECEDENT AND COVENANTS OF THE COMPANY

Conditions to the Series F Investors’ Obligations at the Closing. As of the Closing Date and for the purpose of the Closing, the obligations of each Series F Investor under Section 5 hereunder shall be conditional upon the fulfillment of each of the following conditions, any of which may be waived in writing by such Series F Investor but solely as to such Series F Investor:

3.1 Representations and Warranties; Performance of Obligations.

The representations and warranties made by the Warrantors herein shall be true, complete and accurate in all material respects on and as of the date of this Agreement and the date of the Closing (except (i) to the extent any such Warranties expressly relate to an earlier date, in which case such Warranties shall be so true, complete, and accurate on and as of such earlier date; and (ii) those Warranties qualified by “Material Adverse Effect” which shall be true and accurate in all respects) with the same effect as though such representations and warranties had been made on and as of the date of this Agreement and of the Closing, and the Company shall have performed, in all material respects, all obligations and conditions herein required to be performed or observed by it on or prior to the Closing.

9

3.2 Legal Compliance.

The Company shall have performed and complied, in all material respects, with all obligations and requirements under any currently applicable laws, regulations, rules, orders, or decrees, in particular those in relation to applicable company and securities regulatory regimes and Intellectual Property rights protection in connection with the execution of this Agreement.

3.3 Necessary Approvals.

The Company shall have obtained all approvals, consents and qualifications, as necessary to execute this Agreement pursuant to the terms of this Agreement, the provisions of the M&AA, and applicable law.

3.4 Good Standing of the Company.

No event or transaction that has had or would reasonably be likely to have a Material Adverse Effect shall have occurred and the Company or its Subsidiaries shall not have any change in their respective capital structures (except for such changes taking place pursuant to this Agreement) during the interval beginning on the date of this Agreement and ending on the date of the Closing.

3.5 Definitive Transaction Documents.

The Company, the Series A Preferred Shareholders, the Series B Preferred Shareholders, the Series C Preferred Shareholders, the Series D Preferred Shareholders, the Series E Preferred Shareholders and each other Series F Investor shall have duly executed and delivered to such Series F Investor all relevant transaction documents necessary to consummate the Closing contemplated herein to which they are a party, including, but not limited to (i) this Agreement; (ii) the M&AA; and (iii) the Shareholders’ Agreement and their respective schedules and exhibits hereto and thereto (the “Transaction Documents”).

3.6 No Litigation.

There is no outstanding or pending litigation or arbitration or other legal or contractual proceedings (including litigation or other such proceedings known to be threatened) taken by or against the Company or any of its Subsidiaries.

3.7 Bank Account Designation.

The Company shall have delivered to each Series F Investor the wire transfer instructions for the bank account information of the Company for the wire transfer of the Subscription Price by the Series F Investors.

10

3.8 The M&AA.

The M&AA shall have been filed with the Cayman Registry of Companies (“ROC”), and the Series F Investors shall have received a copy of the cover letter accompanying such filing, confirming that the M&AA has been filed, from the ROC.

3.9 Termination of Existing Agreements.

Effective upon the Closing, (i) any prior stockholder agreements, voting agreements, co-sale agreements, or agreements relating to rights of first offer, rights of first refusal or preemptive rights shall have been terminated and shall be of no further force and effect, and (ii) any prior registration rights agreements shall have been terminated and shall be of no further force and effect.

3.10 Supporting Documents. The Series F Investors at the Closing shall have received the following:

(i) (A) a copy of the favorable opinion from PRC counsel to the Company, addressed to the Series F Investors and dated as of the Closing Date, to the effect that the Company and the Subscription are in compliance with applicable PRC legal and regulatory requirements, including those relating to intellectual property, and that a Qualified Public Offering (as defined in the Shareholders’ Agreement) would not be subject to the requirements of the Provisions on Takeover of Domestic Enterprises by Foreign Investor jointly promulgated by six PRC regulatory authorities, effective as of September 8, 2006 (“Circular 10”), in the form reasonably satisfactory to the Series F Investors; and (B) a favorable opinion from Cayman counsel to the Company dated as of the Closing Date, relating to the creation, issuance and sale of the Series F Preferred Shares in connection with the Subscription, in the form reasonably satisfactory to the Series F Investors;

(ii) a certificate of incumbency executed by the Secretary of the Company (A) certifying the names, titles and signatures of the officers authorized to execute the Transaction Documents and all instruments to be delivered pursuant hereto and thereto and (B) further certifying that the M&AA delivered to the Series F Investors at the time of the execution of this Agreement has been validly adopted and has not been amended or modified.

3.11 Fees of Series F Investors’ Counsel and Consultants.

The Company shall have paid, in accordance with Section 13.1, the fees, expenses and disbursements of legal counsel to the Series F Investors.

3.12 Board of Directors.

As of the Closing, the authorized size of the Board shall be seven, and the Board shall be comprised of Victor Wing Cheung Koo, George Leonard Baker, Jr., Eric Xun Li, Jonathan Zhu, and Nick Lawler, with two vacancies.

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4. CONDITIONS PRECEDENT AND COVENANTS OF THE SERIES F INVESTORS

As of the Closing and for the purpose of the Closing, the obligations of the Company under Section 5 of this Agreement shall be conditional upon the fulfillment or waiver on or prior to the Closing of each of the following conditions; provided that the conditions and covenants of each of the Series F Investors shall be several and not joint and a failure by one Series F Investor to fulfill any condition or covenant shall not remove the Company’s obligations to any other Series F Investor, including, but not limited to, the Company’s obligation to go forward with the Closing with respect to any Series F Investor who has fulfilled its conditions and covenants:

4.1 Representations and Warranties.

The representations and warranties made by the Series F Investors shall be true, complete and accurate in all material respects on and as of the date of this Agreement and the date of the Closing with the same effect as though such representations and warranties had been made on and as of the date of the Closing.

4.2 Necessary Approvals.

Each Series F Investor shall have obtained all necessary corporate or applicable approvals, consents and qualifications for the execution, delivery and the performance of its obligations pursuant to or contemplated in this Agreement, the Shareholders’ Agreement and applicable law.

4.3 Definitive Transaction Documents.

The Series F Investors shall have each duly executed and delivered, as applicable, this Agreement, the Shareholders’ Agreement and their respective schedules and exhibits hereto and thereto.

4.4 Legends.

The Series F Investors understand that the Series F Preferred Shares and any securities issued in respect of or exchange for the Series F Preferred Shares, may bear one or all of the following legends:

4.4.1 “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER

(1) REPRESENTS THAT:

(A) IT IS AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A) UNDER THE SECURITIES ACT; OR

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(B) IT IS ACQUIRING THE SHARES REPRESENTED BY THIS CERTIFICATE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT;

(2) AGREES THAT IT WILL NOT WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(d) UNDER THE SECURITIES ACT AS IN EFFECT WITH RESPECT TO SUCH TRANSFER, RESELL OR OTHERWISE TRANSFER THE SHARES REPRESENTED BY THIS CERTIFICATE EXCEPT:

(A) (I) TO YOUKU.COM INC. OR ANY SUBSIDIARY THEREOF; (II) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR IN A TRANSACTION MEETING THE REQUIREMENTS OF REGULATION D UNDER THE SECURITIES ACT; (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT; OR (IV) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE); OR

(B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT; AND

(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SHARES REPRESENTED BY THIS CERTIFICATE ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION” AND “UNITED STATES” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.”

4.4.1 Any legend required by the securities laws of any state to the extent such laws are applicable to the Series F Preferred Shares represented by the certificate so legended.

5. CLOSING

5.1 Subject to the fulfilment of the Conditions Precedent in Section 3 in full, or the waiver thereof by the relevant Parties hereto, the Closing shall, unless the Parties hereto agree otherwise, take place on the date agreed by the Parties (the “Closing Date”) at the office of Skadden, Arps, Slate, Meagher & Flom LLP located at 30/F, China World Tower 2, No. 1 Jianguomenwai Avenue, Beijing 100004, China.

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5.2 All of the following matters shall be or have been transacted at the time of the Closing:

(a) the Company shall:

(i) have satisfied all the conditions listed in Section 3 hereof (unless waived in whole or in part by the applicable Series F Investor);

(ii) issue and allot as fully paid the Subscription Shares to the Series F Investors, each of which shall be free from all charges, liens, encumbrances, equities or other third party rights, claims or interests (other than those rights contained within the Shareholders’ Agreement), and shall procure that the Series F Investors or their nominees be registered as holders of the Subscription Shares in the register of members of the Company;

(iii) deliver the original share certificates to the Series F Investors or their respective nominees or custodians, as directed by the Series F Investors, issued in the names of the Series F Investors or their respective nominees for the Subscription Shares issued and allotted to the Series F Investors;

(iv) deliver to the Series F Investors a copy of the filed M&AA of the Company in a form and substance in compliance with this Agreement and the Shareholders’ Agreement;

(v) deliver to the Series F Investors certified true copies of the shareholders resolutions and Board resolutions approving:

(1) the adjustment of authorized share capital;

(2) the allotment and issuance of the Subscription Shares to the Series F Investors in accordance with the terms of this Agreement and the delivery of share certificates representing the Subscription Shares to the Series F Investors;

(3) the approval of the execution, delivery and performance of this Agreement and the Shareholders’ Agreement by the Company; and

(4) the adoption of the M&AA and the filing thereof.

(vi) take such actions and do such deeds as reasonably requested by the Series F Investors, which may include without limitation the delivery of any of the Transaction Documents in Sections 3.5 and 5.2 hereof.

(b) The Series F Investors shall:

(i) have satisfied all the conditions listed in Section 4 hereof (unless waived in whole or in part by the Company); and

(ii) wire the cash consideration for its Subscription Shares in the amount specified in Section 2 upon the Closing;

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provided that the obligations of the Series F Investors are several and not joint and a failure by one Series F Investor to fulfill such obligations shall not affect the rights or obligations of any other Series F Investor.

6. WARRANTIES

6.1 The Warrantors jointly and severally represent and warrant to the Series F Investors that each of the Warranties (as set out in Schedule 3A) is true, complete, accurate and not misleading in all respects at the date of this Agreement and that (unless expressly provided to the contrary in the Warranties) if there is any interval of time between the execution of this Agreement and the Closing, the Warranties will continue to be true, complete and accurate in all material respects (unless qualified by “Material Adverse Effect” or expressly provided to the contrary in the Warranties, in which case they will be true, complete, accurate and not misleading in all respects) subsequent to the date of this Agreement up to and including the time of the Closing as if repeated on each such days with reference to the facts then existing and at each of the Closing Dates, save and except as disclosed in the Disclosure Schedule (Schedule 3B) and except for matters that reference a specific date.

6.2 Each of the Warranties shall be construed as a separate and independent Warrantor Warranty and, except where expressly provided to the contrary, shall not be limited or restricted by reference to or inference from the terms of any other Warrantor Warranty or any other terms of this Agreement.

6.3 The Series F Investors shall not be entitled to make any claim under or in respect of the Warranties under this Agreement with respect to matters disclosed in the Disclosure Schedule (Schedule 3B) to the extent so disclosed.

6.4 Except for the specific Warranties expressly made by the Warrantors in this Agreement or any certificate or schedule furnished at the Closing to the Series F Investors pursuant to this Agreement, (i) each Series F Investor acknowledges and agrees that no Warrantor is making any representation or warranty, expressed or implied, at law or in equity, with respect to the Company or the Company’s Subsidiaries, or any of the Company’s or its Subsidiaries’ respective business, assets, liabilities, operations, prospects, or condition (financial or otherwise), including with respect to merchantability or fitness for any particular purpose of any assets, the nature or extent of any liabilities, the prospects of their respective business, the effectiveness or the success of any operations, and (ii) each Series F Investor specifically disclaims that it is relying upon or has relied upon any such other representations or warranties, and acknowledges and agrees that the Warrantors have specifically disclaimed and do hereby specifically disclaim any such other representation or warranty made by any person. Each Series F Investor acknowledges and agrees that it will not assert any claim against the Company, the Company’s Subsidiaries, any officer, director, or shareholder of the foregoing, and any of their respective representatives, or hold the Company, the Company’s Subsidiaries, or any officer, director, or shareholder or any of their respective representatives liable, for any inaccuracies, misstatements or omissions with respect to information (other than in respect to the Warranties contained in this Agreement) furnished by the Company, its Subsidiaries, or any of their respective representatives concerning the Company, the Company’s Subsidiaries, or any of their respective affiliates except for such inaccuracies, misstatements or omissions arising from or related to fraud or wilful misconduct. The provisions of this Section 6, together with the limited remedies provided in Section 9 were specifically bargained-for between the Warrantors and the Series F Investors, and were taken into account by them in arriving at the Subscription Price and the other terms hereof. Each Series F Investor represents and warrants to the Company that such Series F Investor has conducted, to its satisfaction, its own independent investigation of the condition, operations and business of the Company and its Subsidiaries and that such Series F Investor has been provided access to and an opportunity to review any and all information regarding the Company and its Subsidiaries requested by such Series F Investors in order for such Series F Investor to make its own determination to proceed with the transactions contemplated by this Agreement and with the limited representations, warranties and remedies specifically bargained for herein.

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6.5 Except for fraud or willful misconduct, all Warranties in this Agreement, the Schedules, and the Disclosure Schedule shall expire on the first anniversary of the Closing Date; provided, however, that the Warranties set forth in Section 8 of this Agreement and in Sections 1, 2, 3, 6 and 16 of Schedule 3A shall survive the Closing Date indefinitely. All covenants and agreements of the Company contained in this Agreement will survive the Closing indefinitely (except as expressly limited in such covenant or agreement). Save and except as disclosed in this Agreement, the Schedules, or the Disclosure Schedule, the Warranties, covenants and obligations of the Company, and the rights and remedies that may be exercised by the Series F Investors, shall not be limited or otherwise affected by any investigation made by any of the Series F Investors or any of their representatives.

7. SERIES F INVESTOR WARRANTIES

7.1 Each of the Series F Investors hereby represents and warrants severally and not jointly to the Company that each of the Investor Warranties made by such Series F Investor (as set out in Schedule 4) is true, complete, accurate and not misleading in all material respects at the date of this Agreement and, for the purposes of the Closing, on the Closing Date.

7.2 Each of the Series F Investor Warranties shall be construed as a separate and independent Series F Investor Warranty and, except where expressly provided to the contrary, shall not be limited or restricted by reference to or inference from the terms of any other Series F Investor Warranty or any other terms of this Agreement.

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8. CERTAIN US TAX MATTERS

The Warrantors jointly and severally represent and warrant to the Series F Investors that:

8.1 For so long as the Company is treated as a “Controlled Foreign Corporation” (“CFC”) as defined in the U.S. Internal Revenue Code of 1986, as amended (or any successor thereto) (the “Code”), if for any reason a Series F Investor (or such Investor’s Partners) or any of its Affiliates (or such Affiliates’ direct or indirect equity owners) becomes treated as a “United States shareholder” (as defined in Section 951(b) of the Code), the Company agrees, to the extent permitted by law, to annually make dividend distributions to such Series F Investor in an amount equal to 50% of any income deemed distributed to the Investor that would have been deemed distributed to such Series F Investor pursuant to Section 951(a) of the Code. If any Subpart F Income as defined in the Code) is deemed distributed to any Series F Investor, no later than two (2) months following the end of each Company taxable year, the Company shall provide the following information to such Series F Investor or its Affiliate: (i) the Company’s capitalization table as of the end of the last day of such taxable year and (ii) a report regarding the Company’s status as a CFC. In addition, the Company shall provide such Series F Investors and their Affiliates, if applicable, with reasonable access to such other Company information as may be required by the Series F Investors or their Affiliates, if applicable, to determine the Company’s status as a CFC, to determine whether the Investor or any of its Affiliates or any of the Investor’s Partners is required to report its pro rata portion of the Company’s Subpart F Income (as defined in Section 952 of the Code) on its United States federal income tax return, or to allow such Series F Investor, its Affiliates or such Investor’s Partners to otherwise comply with applicable United States federal income tax laws. For purposes of Sections 8.1, 8.2 and 8.4, (i) the term “Investor’s Partners” shall mean each of the Investor’s shareholders, partners, members or other equity holders and any direct or indirect equity owners of such entities and (ii) the “Company” shall mean the Company and any of its Subsidiaries.

8.2 The Company may be treated as a “passive foreign investment company” (“PFIC”) within the meaning of Section 1297 of the Code. If the Company determines that it is a PFIC for the 2010 taxable year, the Company will inform each Series F Investor and its Affiliates, as soon as reasonably practicable, but in any event, no later than 90 days following the end of the Company’s 2010 taxable year, of the amount of such Series F Investor’s and each of its Affiliate’s pro rata share of the Company’s current and historic earnings and profits (on a per share basis, as determined for purposes of Section 1298(b)(1) of the Code) as of the last day of the Company’s 2010 taxable year. If the Company determines that it is treated as a PFIC for the 2011 taxable year or any subsequent taxable year, the Company will, as soon as reasonably practicable, but in any event, no later than 90 days following the end of the taxable year during which the Company was a PFIC, (i) inform each Series F Investor and its Affiliates that the Company was a PFIC, (ii) inform each Series F Investor and each of its Affiliates that choose to make a “Qualified Electing Fund” election pursuant to Section 1295 of the Code (or, if applicable, in connection with such election made by such Investor’s Partners or such applicable Affiliates’ direct or indirect equity owners) of the amount of such Series F Investor’s and each of its Affiliate’s pro rata share of the Company’s ordinary earnings and net capital gain (as determined for purposes of Section 1293(a) of the Code) for the applicable taxable year of the Company, (iii) inform each Series F Investor and each of its Affiliates that choose to make a “deemed dividend” election pursuant to Section 1291(d)(2) of the Code (or, if applicable, in connection with such election made by such Investor’s Partners or such applicable Affiliates’ direct or indirect equity owners) of the amount of such Series F Investor’s and each of its Affiliate’s pro rata share of the Company’s current and historic earnings and profits (on a per share basis, as determined for purposes of section 1291(d)(2) of the Code) as of the last day of the applicable taxable year of the Company and (iv) provide the Series F Investors and their Affiliates with access to such other Company information as may be reasonably required for purposes of filing U.S. federal income tax returns in connection with such Qualified Electing Fund election. For purposes of this Section 8.2, the Company’s “taxable year” means the Company’s fiscal year ending December 31 unless determined otherwise pursuant to the Code. In the event that a Series F Investor has made a “deemed dividend” election or a “Qualified Electing Fund” election with respect to a taxable year of the Company, the Company agrees to make a dividend distribution to the Investor (no later than ninety (90) days following the end of the Company’s taxable year or, if later, ninety (90) days after the Company is informed by such Series F Investor that such Investor has made a “deemed dividend” election or a “Qualified Electing Fund” election with respect to such taxable year of the Company) in an amount equal to 50% of the amount that would be included by the Investor as a result of a valid and timely “deemed dividend” election or “Qualified Electing Fund” election, as the case may be, which was applicable to such taxable year.

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8.3 The Company shall take such actions, including making an election to be treated as a corporation or refraining from making an election to be treated as a partnership, as may be required to ensure that at all times the Company is treated as corporation for United States federal income tax purposes.

8.4 The Company shall make due inquiry with its tax advisors (and shall cooperate with the Series F Investors’ tax advisors with respect to such inquiry) on at least an annual basis regarding whether the Series F Investors’, any of such Series F Investor’s Affiliates or any such Investors’ Partners’ direct or indirect interest in the Company are subject to the reporting requirements of either or both of Sections 6038 and 6038B of the Code (and the Company shall duly inform the Series F Investors of the results of such determination), and in the event that such Series F Investors’, any such Series F Investor’s Affiliates or any such Investors’ Partners’ direct or indirect interests in the Company are determined by the Company’s tax advisors or the Series F Investors’ tax advisors to be subject to the reporting requirements of either or both of Sections 6038 and 6038B, the Company agrees, upon a request from such affected Series F Investor or such Series F Investor’s Affiliate, to provide such information as may be necessary to fulfil such Series F Investor’s, such Series F Investor’s Affiliate’s or such Investor’s Partner’s obligations thereunder.

8.5 The Company hereby represents, warrants and acknowledges that (i) it has no plan to (and it has not engaged in any transactions to) complete the direct or indirect acquisition of substantially all of the properties held directly or indirectly by a domestic corporation or substantially all of the properties constituting a trade or business of a domestic partnership, and (ii) it is not a “surrogate foreign corporation” within the meaning of Section 7874(a)(2)(B) of the Code.

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9. INDEMNIFICATION

9.1 From and after the Closing until the earlier of (i) the first anniversary of the Closing Date; or (ii) the consummation of a Qualified Public Offering (as defined in the M&AA), the Warrantors shall jointly and severally indemnify and hold harmless each of the Series F Investors against any and all losses, damages (but excluding any consequential, incidental, or punitive damages except to the extent such consequential, incidental or punitive damages arise from or in connection with third party claims, actions, suits or proceedings), liabilities, costs, claims, actions and expenses (including legal and accounting fees) or demands which may arise from any breach, default or failure by the Warrantors of the Warranties or any agreement or covenant of the Warrantors contained herein, or in connection with or arising from claims, actions, suits, proceedings or similar claims by any Person or entity (other than such Series F Investor) associated or relating to the execution, delivery and performance of this Agreement, any of the other Transaction Documents or the M&AA or the transactions contemplated hereby or thereby. Notwithstanding anything herein to the contrary, the time limits in (i) and (ii) of the preceeding sentence shall not apply to the Tax Indemnity in Section 9.3. Section 9.3 shall continue in effect until the expiration of the relevant statute of limitations applicable to a Series F Investor for any taxable year such Series F Investor was a Shareholder.

9.2 Notwithstanding anything herein to the contrary, the Company shall have no liability for indemnification pursuant to this Section 9 or otherwise until the total liability for any breach, default, or failure (“Losses”) by the Company of the Warranties exceeds US$500,000 (the “Basket”), and then the Company shall indemnify such Indemnified Party for the amount of all of its Losses. Notwithstanding anything herein to the contrary, the maximum liability (the “Cap”) of the Warrantors for the Losses shall not exceed the total consideration paid by the Series F Investors for their Subscription Shares under this Agreement; provided, that if after six (6) months following the Closing Date, no claims have been made by the Series F Investors hereunder, the Cap shall be reduced to fifteen percent (15%) of the total consideration paid by the Series F Investors for their Subscription Shares under this Agreement.

9.3 Notwithstanding the Basket and Cap set forth in Section 9.2, subject to Section 9.1, the Company shall indemnify each Series F Investor against any and all Losses suffered by such Series F Investor arising from any breach, default or failure by the Warrantors of the Warranties or any agreement or covenant of the Warrantors contained in Section 8 of this Agreement without regard to the Basket and the Cap set forth in Section 9.2 (the “Tax Indemnity”). Notwithstanding anything herein to the contrary, the maximum liability of the Warrantors for the Losses to each Series F Investor shall not exceed the total consideration paid by such Series F Investor for its Subscription Shares under this Agreement.

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9.4 To the extent any indemnifiable losses of the Company pursuant to this Section 9 are reflected as a reserve, liability or similar item on the audited financials of the Company, such losses to the extent so reflected shall not be subject to indemnification pursuant to this Section 9.

9.5 Except for fraud and wilful misconduct, the indemnity provided in this Section 9 shall be the sole and exclusive remedy of the Series F Investors in relation to any breach of any Warranties.

9.6 Notwithstanding anything herein to the contrary, no claim for indemnification hereunder shall be commenced without the affirmative written approval of the Series F Investors who subscribed for at least a majority of the Series F Preferred Shares purchased hereunder.

10. SPECIAL COVENANTS AFTER CLOSING

10.1 Use of Proceeds. The Company hereby covenants that it shall limit the use of the proceeds of the funds it receives upon the Closing as the consideration for the Subscription Shares for the purposes of capital expenditure, marketing, repayment of the debts and liabilities set forth on Schedule 5, and general corporate purposes. The Company shall not use the proceeds of the funds it receives upon the Closing as the consideration for the Subscription Shares, in whole or in part, for repurchase, redemption or cancellation of any securities held by any prior investors thereto, unless such use of funds is duly authorized by a Board resolution duly passed in accordance with the terms and provisions of the Shareholders’ Agreement and the M&AA.

10.2 Registration of Equity Pledge Agreement. The Company shall, within a reasonable time after Closing, but in any event no later than October 1, 2010, duly register the Equity Pledge Agreements with the appropriate office of Administration of Industry and Commerce.

10.3 Business Scope. The Company shall continue to maintain an authorized business scope under which the ICP Co is permitted to carry on all businesses it is currently conducting under applicable PRC laws and regulations. The Company shall also seek to apply for the expansion of the ICP Co’s authorized business scope when and if necessary to be in compliance with applicable PRC laws and licenses.

10.4 Application for Additional Business Licenses. The Company shall maintain all existing business licenses, permits and certificates. The Company shall use commercially reasonable efforts to obtain additional business licenses, permits or certificates that are necessary for the Company’s business operations as then being conducted to be in compliance with applicable PRC laws and licenses in all material respects.

11. NOTICES

11.1 Any notice or other communication given or made under this Agreement shall be in writing.

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11.2 Any such notice or other communication shall be addressed as provided in this Section 11 and, if so addressed, shall be deemed to have been duly given or made as follows:

(a) if sent by personal delivery, upon delivery at the address of the relevant Party;

(b) if sent by an internationally recognized carrier, three (3) Business Days after the date of posting; and

(c) if sent by facsimile, upon despatch to the facsimile number of the recipient, with the production of a transmission report by the machine from which the facsimile was sent which indicates that the facsimile was sent in its entirety to the facsimile number of the recipient.

11.3 The relevant address and facsimile number of each Party for the communication purposes of this Agreement, subject to Section 11.4, is set out on the signature pages hereof.

11.4 A Party may notify the other Parties to this Agreement of a change to its name, address or facsimile number for the purpose of this Section provided that such notification shall only be effective on:

(i) if sub-section (ii) does not apply, the date specified in the notification as the date on which the change is to take place; or

(ii) if no date is specified or the date specified is less than seven (7) Business Days after (and excluding) the date on which the notice is given, the date falling seven (7) Business Days after notice of any such change has been given.

12. CONFIDENTIALITY

12.1 Subject to Section 12.2, each Party shall treat as strictly confidential all information received or obtained as a result of entering into or performing this Agreement which relates to:

(i) the specific economic and financial provisions of this Agreement;

(ii) the negotiations relating to this Agreement; and

(iii) the identity of the other Parties, and no Party shall make any public announcement or identify any Party by name without the prior written consent of such Party.

12.2 Each Party may disclose information which would otherwise be confidential if and to the extent:

(i) required by the law of any relevant jurisdiction;

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(ii) required by existing contractual obligations and with the prior written consent of the other Parties hereto (which consent shall not be unreasonably withheld or delayed);

(iii) required by any securities exchange or regulatory or governmental body to which such Party or the Company is subject or submits, wherever situated;

(iv) disclosed to the professional advisors, advisory clients, auditors and bankers of each Party or of the Company for the purpose of this Agreement;

(v) if a Party is a fund, or an investment advisory client of T. Rowe Price or Morgan Stanley, then (a) to its fund manager and its professional advisors, auditors, bankers, partners, members, stockholders and equity holders for the purpose of this Agreement, and (b) if it is required for fund and inter-fund reporting (as applicable), for such reporting only;

(vi) if a party is an investment advisor, then to its investment advisory clients, professional advisors, auditors, bankers, partners and members;

(vii) the information has come into the public domain through no fault of that Party (as proven by such Party);

(viii) such disclosure is made in connection with the enforcement of any right or remedy relating to this Agreement or the Transaction Documents or the transactions contemplated hereby or thereby;

(ix) such information was independently developed by such Party without reference to confidential information obtained hereunder (as proven by such Party);

(x) such information was obtained from a third party not, to the knowledge of and as proven by the receiving party, in breach of any non-disclosure obligations to the disclosing party;

(xi) permitted pursuant to the terms of any written agreement between such Party and the disclosing Party; or

(vii) the disclosing Party has given prior written approval to the disclosure;

PROVIDED THAT, unless prohibited by any relevant law, governmental or regulatory bodies or any securities exchange, any order or decree, any such information disclosed pursuant to sub-sections (i) or (iii) above shall, if practical, be disclosed only after consultation with and notice to the other Parties to which the information relates.

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13. COSTS AND EXPENSES

13.1 The Parties shall bear the reasonable legal fees, costs and expenses respectively incurred thereby in relation to the negotiations, preparations, execution and performance of this Agreement and all other transactions incidental to and/or contemplated by this Agreement, provided that, upon the Closing, the Company will pay at the Closing the reasonable out-of-pocket expenses (including legal fees) up to a maximum of US$100,000, upon receipt of invoices therefor, incurred by the persons named in items 107-122 of the Shareholders’ Agreement in connection with the transactions contemplated hereby (an estimate of the fees and expenses of such counsel may be paid by check delivered or wire transfer to such counsel at the Closing by such persons). To the extent unforeseen exigent circumstances require, the Company agrees to pay reasonable increases to such amount, provided that such persons shall obtain the Company’s consent to such increases in advance.

13.2 Any duty or tax arising on the issue and allotment of any of the Subscription Shares to the Series F Investors shall be borne solely by the Company.

14. MISCELLANEOUS

14.1 Surviving Provisions.

Notwithstanding anything to the contrary under this Agreement, Sections 1, 8, 9, 10, 11, 12, 13, 14 and 15 shall remain in full force and effect after, and shall survive notwithstanding, the Closing hereunder.

14.2 Successors and Assigns.

(i) This Agreement is personal to the Parties hereto and save as expressly provided herein, none of them may assign, mortgage, charge or sub-license any of their respective rights herein, or sub-contract or otherwise delegate any of its obligations herein, except with the prior written consent of the other Parties hereto.

(ii) Subject to sub-section (i) above, this Agreement shall be binding on and inure for the benefit of the successors, permitted assigns and personal representatives (as the case may be) of each of the Parties hereto.

(iii) Notwithstanding the above, it is agreed that the Series F Investors may transfer and assign all the rights and obligations hereunder to its Affiliates in its sole discretion upon written notice to the other Parties.

14.3 Cumulative Rights.

Unless otherwise provided in this Agreement, any remedy conferred on any Party hereto for breach of this Agreement shall be in addition and without prejudice to all other rights and remedies available to it.

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14.4 Entire Agreement and Variation.

This Agreement shall supersede all and any previous agreements, understandings or arrangements (if any) among the Parties hereto or any of them in relation to the subject matter hereof and all or any such previous agreements, understandings or arrangements (if any) shall cease to be of any force or effect from the date hereof. This Agreement constitutes the whole agreement among the Parties hereto or any of them in relation to the subject matter hereof (no Party having relied on any representation, warranty or undertaking made by any other Party which is not a term of this Agreement) and no variation to this Agreement shall be effective unless made in writing and signed by each of the Parties hereto. The sole and exclusive remedies for any breach of the terms and provisions of this Agreement (including any representations and warranties set forth herein) shall be those remedies available at law or in equity for breach of contract only (as such contract remedies may be further limited or excluded pursuant to the express terms of this Agreement), except for any breach arising out of or related to fraud or wilful misconduct; and the Parties hereto hereby waive and release any and all tort claims and causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement (including any tort claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement), except for any tort claim or cause of action that may be based upon, arise from or relate to fraud or wilful misconduct.

14.5 Further Assurance.

Each of the Parties hereto undertakes severally and not jointly with each of the other Parties that it shall do, or shall procure to be done, all such acts and things and shall execute, or shall procure to be executed, all such documents as may be necessary or appropriate to implement the provisions of this Agreement or otherwise to give full legal force and effect thereof.

14.6 Severability.

The Parties hereto intended that the provisions of this Agreement shall be enforced to the maximum extent permissible under the laws applied in each jurisdiction in which enforcement of any provisions of this Agreement is sought. If any particular provision or part of this Agreement shall be held to be invalid or unenforceable, this Agreement shall be deemed to be amended by the deletion of the provision or part held to be invalid or unenforceable or, to the extent permissible by the applicable laws of the relevant jurisdiction in which such enforcement is sought, such provision or part shall be deemed to be varied in such a way as to achieve most closely the purpose of the original provision or part in a manner which is valid and enforceable, provided that for the avoidance of doubt, such amendments shall apply only with respect to the operation of this Agreement in the particular jurisdiction in which the decision as to invalidity or unenforceability is made.

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14.7 Non-Waiver.

No delay or omission on the part of any Party hereto in exercising any right, power or privilege shall operate to impair such right, power or privilege or be construed as a waiver by such Party of the same and no single or partial exercise or non-exercise or delay in exercising any right, power or privilege by any Party hereto shall in any circumstances preclude any other or further exercise by such Party of such right, power or privilege or the exercise of any other right, power or privilege by such Party.

14.8 Counterparts.

This Agreement may be executed in counterparts and by different Parties hereto on separate copies or counterparts and which taken together shall constitute one and the same agreement. The facsimile transmissions of any executed original document (including without limitation, any page of an original document on which an original signature appears) and/or retransmission of any such facsimile transmission shall be deemed to be the same as the delivery of an executed original. At the request of any Party hereto, the other Parties hereto shall confirm facsimile transmissions by executing duplicate original documents and delivering the same to the requesting Party or Parties.

14.9 Time of Essence.

Time shall be of essence in this Agreement and this Section shall apply to any extension of time in relation to this Agreement as may be agreed by the Parties hereto from time to time.

14.10 Shareholders’ Agreement.

The Parties hereto shall upon execution of this Agreement simultaneously enter into the Shareholders’ Agreement in the form and substance attached hereto as Exhibit 1.

14.11 No Third Party Liability.

This Agreement may only be enforced against the named parties hereto. All claims or cause of action (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement (including any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement), may be made only against the entities that are expressly identified as parties hereto; and no officer, director, shareholder, employee, representative or affiliate of any party hereto (including any person negotiating or executing this Agreement on behalf of a party hereto) shall have any liability or obligation with respect to this Agreement or with respect to any claim or cause of action (whether in contract or tort) that may arise out of or be related to this Agreement, or the negotiation, execution or performance of this Agreement (including a representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement).

25

14.12 Exculpation Among Series F Investors.

Each Series F Investor acknowledges that it is not relying upon any person, firm or corporation, other than the Company and its officers and directors (acting solely in their capacities as agents of the Company), in making its investment or decision to invest in the Company. Each Series F Investor agrees that no Series F Investor nor the respective controlling persons, officers, directors, partners, agents, or employees of any Series F Investor shall be liable to any other Series F Investor for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Subscription Shares.

14.13 Rights of Series F Investors.

Each Series F Investor, in its sole and absolute discretion, may exercise or refrain from exercising any rights or privileges that such Series F Investor may have pursuant to this Agreement, the other Transaction Documents, or at law or in equity, and such Series F Investor shall not, except as provided in this Agreement or as required by law, the Shareholders’ Agreement or the M&AA, incur or be subject to any liability or obligation to the Company, any other Series F Investor or holder of Series F Preferred Shares, any other shareholder or securityholder of the Company or any other person, by reason of exercising or refraining from exercising any such rights or privileges.

14.14 No Commitment for Additional Financing.

The Company acknowledges and agrees that no Series F Investor has made any representation, undertaking, commitment or agreement to provide or assist the Company in obtaining any financing, investment or other assistance, other than the purchase of the Series F Preferred Shares as set forth herein and subject to the Conditions Precedent. In addition, the Company acknowledges and agrees that (a) no statements, whether written or oral, made by any Series F Investor or its representatives on or prior to the date hereof shall have created an obligation, commitment or agreement to provide or assist the Company in obtaining any financing or investment, (b) the Company shall not rely on any such statement by any Series F Investor or its representatives and (c) an obligation, commitment or agreement to provide or assist the Company in obtaining any financing or investment may only be created by a written agreement, signed by such Series F Investor and the Company, setting forth the terms and conditions of such financing or investment and stating that the parties intend for such writing to be a binding obligation or agreement. Absent a written agreement to the contrary, signed by such Series F Investor, such Series F Investor shall have the right in its sole and absolute discretion to refuse or decline to participate in any other financing of or investment in the Company, and shall have no obligation to assist or cooperate with the Company in obtaining any financing, investment or other assistance.

26

15. DISPUTE RESOLUTION

15.1 Resolution by Consultation.

Any dispute, controversy or claim arising out of or relating to this Agreement, or the interpretation, breach, termination or validity hereof, shall be resolved through consultation. Such consultation shall begin immediately after one Party hereto has delivered to the other Party hereto a written request for such consultation. If within thirty (30) days following the date on which such notice is given the dispute cannot be resolved, the dispute shall be submitted to arbitration according to Section 15.2 below upon the request of either Party with notice to the other(s).

15.2 Arbitration Venue and Arbitrators.

The arbitration shall be conducted in Hong Kong, under the auspices of the Hong Kong International Arbitration Centre (“HKIAC”) in accordance with the UNCITRAL Arbitration Rules (the “UNCITRAL Rules”) then in effect. The arbitration tribunal shall consist of three arbitrators to be appointed according to the UNCITRAL Rules. The language of the arbitration shall be English.

15.3 Effect of Award.

The award of the arbitration tribunal shall be final and binding upon the disputing parties and, in the case where the subdued party does not perform the award, the prevailing party may apply to a court of competent jurisdiction for enforcement of such award.

15.4 Applicable Law.

The arbitrators shall decide any dispute submitted by the Parties to the arbitration strictly in accordance with the substantive law of New York State and shall not apply any other substantive law.

15.5 Information Disclosure.

Each Party hereto shall co-operate with the other(s) in making full disclosure of and providing complete access to all information and documents requested by the other(s) in connection with such arbitration proceedings, subject only to any confidentiality obligations binding on such Party.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

27

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

Company:

For and on behalf of:
Youku.com Inc.
By:	/s/ Victor Wing Cheung Koo
Name:	Victor Wing Cheung KOO
Position:	Director and Chief Executive Officer
Address:	5th Floor, SinoSteel Plaza 8 Haidian Street, Haidian District Beijing 100080
Attn:	Dele LIU, Senior Vice President and Chief Financial Officer
Fax:	(8610) -59708818

[Series F Investors Signature Pages Follow]

[Company Signature Page to Share Purchase Agreement]

SERIES F INVESTOR

For and on behalf of:
FARALLON CAPITAL PARTNERS, L.P.
By:	Farallon Partners, L.L.C.
Its:	General Partner
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Its:	Managing Member
Address:	c/o Farallon Capital Management, L.L.C.,
	One Maritime Plaza, Suite 2100
	San Francisco, CA94111
	Attention: Chun R. Ding and Erik Chu
	Fax: (415) 421-2133
FARALLON CAPITAL INSTITUTIONAL PARTNERS, L.P.
By:	Farallon Partners, L.L.C.
Its:	General Partner
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Its:	Managing Member
Address:	c/o Farallon Capital Management, L.L.C.,
	One Maritime Plaza, Suite 2100
	San Francisco, CA94111
	Attention: Chun R. Ding and Erik Chu
	Fax: (415) 421-2133
FARALLON CAPITAL INSTITUTIONAL PARTNERS II, L.P.
By:	Farallon Partners, L.L.C.
Its:	General Partner
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Its:	Managing Member

[Series F Investors Signature Pages to Share Purchase Agreement]

Address:	c/o Farallon Capital Management, L.L.C.,
	One Maritime Plaza, Suite 2100
	San Francisco, CA94111
	Attention: Chun R. Ding and Erik Chu
	Fax: (415) 421-2133
FARALLON CAPITAL INSTITUTIONAL PARTNERS III, L.P.
By:	Farallon Partners, L.L.C.
Its:	General Partner
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Its:	Managing Member
Address:	c/o Farallon Capital Management, L.L.C.,
	One Maritime Plaza, Suite 2100
	San Francisco, CA94111
	Attention: Chun R. Ding and Erik Chu
	Fax: (415) 421-2133
FARALLON CAPITAL OFFSHORE INVESTORS II, L.P.
By:	Farallon Partners, L.L.C.
Its:	General Partner
Signature:	/s/ Monica R. Landry
Name:	Monica R. Landry
Its:	Managing Member
Address:	c/o Farallon Capital Management, L.L.C.,
	One Maritime Plaza, Suite 2100
	San Francisco, CA94111
	Attention: Chun R. Ding and Erik Chu
	Fax: (415) 421-2133

[Series F Investors Signature Pages to Share Purchase Agreement]

CHENGWEI PARTNERS, L.P.
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
Address:	c/o Chengwei Ventures
	58 West Portal Avenue #146
	San Francisco, California 94127
CHENGWEI VENTURES EVERGREEN FUND, L.P.
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
Address:	c/o Chengwei Ventures
	58 West Portal Avenue #146
	San Francisco, California 94127
CHENGWEI VENTURES EVERGREEN ADVISORS FUND, LLC
By:	Chengwei Ventures Evergreen Management, LLC
Its:	Managing Member
Signature:	/s/ Aline Moulia
Name:	Aline Moulia
Its:	Authorized Signer
Address:	c/o Chengwei Ventures
	58 West Portal Avenue #146
	San Francisco, California 94127

[Series F Investors Signature Pages to Share Purchase Agreement]

BROOKSIDE CAPITAL PARTNERS FUND, L.P.

Signature:	/s/ Matt McPherron
Name:	MATT MCPHERRON
Its:
Address:	111 Huntington Avenue
	Boston, MA 02199
	United States of America

[Series F Investors Signature Pages to Share Purchase Agreement]

MAVERICK USA II, CORP.
By:	Maverick Capital, Ltd.
Its:	Attorney-in-Fact
Signature:	/s/ John T. McCafferty
Name:	John T. McCafferty
Its:	Limited Partner & General Counsel
Address:	300 Crescent Court 18th Floor
	Dallas, Texas 75201
	Fax: (214) 880-4020

[Series F Investors Signature Pages to Share Purchase Agreement]

SERIES F INVESTOR

T. ROWE PRICE ASSOCIATES, INC.

On behalf of its advisory Funds and Accounts on

Attachment A

T. ROWE PRICE ASSOCIATES, INC.

For and on Behalf of:

T. Rowe Price New Horizons Fund, Inc.

T. Rowe Price New Horizons Trust

T. Rowe Price U.S. Equities Trust

By:	/s/ Kris H. Jenner
Name:	Kris H. Jenner
Title:	Vice President

T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, Maryland 21202

Attention: Andrew Baek

Vice President and Senior Legal Counsel

Phone: 410-345-2090

Email: Andrew_baek@troweprice.com

[Series F Investors Signature Pages to Share Purchase Agreement]

SERIES F INVESTOR

T. ROWE PRICE ASSOCIATES, INC.

On behalf of its advisory Funds and Accounts on

Attachment A

T. ROWE PRICE ASSOCIATES, INC.

For and on Behalf of:

T. Rowe Price Global Technology Fund, Inc.

TD Mutual Funds – TD Science & Technology Fund

By:	/s/ David J. Eiswert
Name:	David J. Eiswert
Title:	Vice President

T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, Maryland 21202

Attention: Andrew Baek

Vice President and Senior Legal Counsel

Phone: 410-345-2090

Email: Andrew_baek@troweprice.com

[Series F Investors Signature Pages to Share Purchase Agreement]

SERIES F INVESTOR

T. ROWE PRICE ASSOCIATES, INC.

On behalf of its advisory Funds and Accounts on

Attachment A

T. ROWE PRICE ASSOCIATES, INC.

For and on Behalf of:

T. Rowe Price Science & Technology Fund, Inc.

Valic Company I – Science & Technology Fund

John Hancock Trust – Science & Technology Trust

By:	/s/ David J. Eiswert
Name:	David J. Eiswert
Title:	Vice President

T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, Maryland 21202

Attention: Andrew Baek

Vice President and Senior Legal Counsel

Phone: 410-345-2090

Email: Andrew_baek@troweprice.com

[Series F Investors Signature Pages to Share Purchase Agreement]

MORGAN STANLEY INVESTMENT MANAGEMENT SMALL COMPANY GROWTH TRUST
By: State Street Bank and Trust Company
Trustee
By:	/s/ James E Hachey
Name:	James E Hachey
Title:	Vice President
Address:	c/o Morgan Stanley Investment Management
	522 Fifth Avenue
	New York, New York 10036
MORGAN STANLEY INSTITUTIONAL FUND, INC. – SMALL COMPANY GROWTH PORTFOLIO
By: Morgan Stanley Investment Management Inc.
Investment Manager
By:	/s/ James E Hachey
Name:	James E Hachey
Title:	Vice President
Address:	522 Fifth Avenue
	New York, New York 10036
THE UNIVERSAL INSTITUTIONAL FUNDS, INC. – SMALL COMPANY GROWTH PORTFOLIO
By: Morgan Stanley Investment Management Inc.
Investment Manager
By:	/s/ Jason Yeung
Name:	Jason Yeung
Title:	Executive Director
Address:	522 Fifth Avenue
	New York, New York 10036
NATIONWIDE VARIABLE INSURANCE TRUST – NVIT MULTI-MANAGER SMALL COMPANY FUND
By: Morgan Stanley Investment Management Inc.
Sub-Adviser
By:	/s/ Jason Yeung
Name:	Jason Yeung
Title:	Executive Director
Address:	522 Fifth Avenue
	New York, New York 10036

[Series F Investors Signature Pages to Share Purchase Agreement]

TRANSAMERICA FUNDS – TRANSAMERICA MORGAN STANLEY SMALL COMPANY GROWTH
By: Morgan Stanley Investment Management Inc.
Sub-Adviser
By:	/s/ Jason Yeung
Name:	Jason Yeung
Title:	Executive Director
Address:	522 Fifth Avenue
	New York, New York 10036
BELL ATLANTIC MASTER TRUST
By: Morgan Stanley Investment Management Inc.
Investment Manager
By:	/s/ Jason Yeung
Name:	Jason Yeung
Title:	Executive Director
Address:	522 Fifth Avenue
	New York, New York 10036
MORGAN STANLEY INSTITUTIONAL FUND, INC. - INTERNATIONAL OPPORTUNITY PORTFOLIO
By: Morgan Stanley Investment Management Inc.
Investment Manager
By:	/s/ Jason Yeung
Name:	Jason Yeung
Title:	Executive Director
Address:	522 Fifth Avenue
	New York, NY 10036
MORGAN STANLEY INSTITUTIONAL FUND, INC. – GLOBAL GROWTH PORTFOLIO
By: Morgan Stanley Investment Management Inc.
Investment Manager
By:	/s/ Jason Yeung
Name:	Jason Yeung
Title:	Executive Director
Address:	522 Fifth Avenue
	New York, NY 110036

[Series F Investors Signature Pages to Share Purchase Agreement]

EX-5.1

Exhibit 5.1

FORM OF APPLEBY LEGAL OPINION

Youku.com Inc.

5/F, SinoSteel Plaza

8 Hadian Street

Beijing 10080

People’s Republic of China

2010

Dear Sirs

Youku.com Inc. (the “Company”)

This opinion as to Cayman Islands law is addressed to you in connection with the proposed initial public offering (the “Offering”) of the Company’s ordinary shares (the “Shares”) to be represented by American depositary shares (the “ADSs”), as described in the prospectus (the “Prospectus”) contained in the Company’s registration statement on Form F-1, as amended and filed by the Company under the United States Securities Act of 1933, as amended (the “Securities Act”) with the United States Securities and Exchange Commission (the “SEC”) and more particularly described in the Schedule hereto (the “Registration Statement”, which term includes the Prospectus but does not include any exhibits thereto).

For the purposes of giving this opinion, we have examined and relied upon copies of the Registration Statement. We have also examined and relied upon the documents listed, and in some cases defined, in the Schedule to this opinion (“Documents”). Unless otherwise defined herein, capitalised terms have the meanings assigned to them in the Schedule.

Assumptions

In stating our opinion we have assumed:

(a) the authenticity, accuracy and completeness of all the Documents submitted to us and other documents examined by us as originals and the conformity to authentic original documents of all Documents submitted to us and other such documents examined by us as certified, conformed, notarised, faxed, scanned or photostatic copies;

(b) that each of the Documents and other such documents which was received by us by electronic means is complete, intact and in conformity with the transmission as sent;

(c) the genuineness of all signatures on the Documents;

(d) that any representation, warranty or statement of fact or law, other than as to the laws of Cayman Islands, made in any of the Documents is true, accurate and complete;

(e) that the Resolutions are in full force and effect, have not been rescinded, either in whole or in part, and accurately record the resolutions passed by the directors and shareholders of the Company adopted by all the directors and shareholders of the Company as unanimous written resolutions of the directors and shareholders of the Company, that all interests of the Directors in the subject matter of the Resolutions, if any, have been declared and disclosed in accordance with the Amended and Restated Articles of Association of the Company and that there is no matter affecting the authority of the directors to file the Registration Statement with the SEC and complete the Offering, not disclosed by the Constitutional Documents or the Resolutions, which would have any adverse implication in relation to the opinions expressed herein;

(f) that the Constitutional Documents are complete and accurate and constitute a complete and accurate record of the business transacted and resolutions passed or adopted by the Company and all matters required by law and the Amended and Restated Memorandum and Articles of Association of the Company to be recorded therein are so recorded;

(g) the validity and binding effect under the laws of the United States of America of the Registration Statement and that the Registration Statement will be duly filed with and declared effective by the SEC; and

(h) that the Registration Statement as filed, declared effective by the SEC and/or published, will be in substantially the same form as that examined by us for purposes of this opinion.

Opinion

Based upon and subject to the foregoing and subject to the reservations set out below and to any factual matters not disclosed to us, other than any matters which are of a public nature in the Cayman Islands, we are of the opinion that:

1. The Company is an exempted company duly incorporated with limited liability and existing under the laws of the Cayman Islands. The Company possesses the capacity to sue and be sued in its own name and is in good standing under the laws of the Cayman Islands.

2. The Company has all requisite corporate power and authority to enter into, execute, deliver, and perform its obligations under the Registration Statement and to take all action as may be necessary to complete the transactions contemplated thereby.

3. Based solely upon a review of the Constitutional Documents, the Company has an authorised share capital of US$50,000, divided into 5,000,000,000 shares of par value US$0.00001 each, comprising 3,797,418,953 ordinary shares with a par value of US$0.00001 each, of which 82,500,000 Preferred Shares are designated as Series A Preferred Shares, 165,825,000 Preferred Shares are designated as Series B-1 Preferred Shares, 112,875,000 Preferred Shares are designated as Series B-2 Preferred Shares, 317,398,462 Preferred Shares are designated as Series C Preferred Shares, 209,737,212 Preferred Shares are designated as Series D Preferred Shares, 213,779,664 Preferred Shares are designated as Series E Preferred Shares and 100,465,709 Preferred Shares are designated as Series F Preferred Shares. As of the date of the Registration Statement, there are 365,000,000 ordinary shares, 82,500,000 Series A Preferred Shares, 165,825,000 Series B-1 Preferred Shares, 112,875,000 Series B-2 Preferred Shares, 308,770,154 Series C Preferred Shares, 209,737,212 Series D Preferred Shares, 209,849,890 Series E Preferred Shares and 100,465,709 Series F Preferred Shares issued and outstanding.

Immediately prior to the completion of the offering and pursuant to the Resolutions, the authorized capital of the Company, being US$50,000, will be divided into 5,000,000,000 shares of par value US$0.00001 each, comprising (i) 3,137,657,746 Class A Ordinary Shares; (ii) 659,761,207 Class B Ordinary Shares; (iii) 82,500,000 Series A Preferred Shares; (iv) 165,825,000 Series B-1 Preferred Shares and 112,875,000 Series B-2 Preferred Shares; (v) 317,398,462 Series C Preferred Shares; (vi) 209,737,212 Series D Preferred Shares; (vii) 213,779,664 Series E Preferred Shares; and (viii) 100,465,709 Series F Preferred Shares. Immediately prior to the completion of the offering, (i) all ordinary shares issued and outstanding and held by certain shareholders will be automatically re-designated as Class B ordinary shares; (ii) all other ordinary shares issued and outstanding will be automatically re-designated as Class A ordinary shares; (iii) certain of the Company’s Preferred Shares will be automatically re-designated as Class B ordinary shares; and (iv) certain of the Company’s Preferred Shares will be automatically re-designated as Class A ordinary shares (such Class A ordinary shares being the “Offering Shares”).

4. When issued and paid for as contemplated by the Registration Statement, and once entered in the Register of Members of the Company against the name of the corresponding subscriber, all Shares will be validly issued, fully paid and non-assessable.

5. When issued and once entered in the Register of Members of the Company against the name of the corresponding subscriber, all Offering Shares will be validly issued, fully paid and non-assessable.

6. The statements relating to certain Cayman Islands tax matters set forth under the heading “Taxation – Cayman Islands Taxation” in the Prospectus forming part of the Registration Statement, to the extent that they constitute statements of Cayman Islands law, are accurate in all material respects.

Reservations

We have the following reservations:

(a) We express no opinion as to any law other than Cayman Islands law and none of the opinions expressed herein relates to compliance with or matters governed by the laws of any jurisdiction except the Cayman Islands. This opinion is limited to Cayman Islands law as applied by the Courts of the Cayman Islands at the date hereof.

(b) The Registry of Companies in the Cayman Islands is not public in the sense that copies of the Constitutional Documents and information on directors and shareholders is not publicly available. We have therefore obtained the corporate documents specified in the Schedule hereto from the Company and relied exclusively on the Officer’s Certificate for the verification of such corporate information.

(c) In paragraph 1 above, the term “good standing” means that the Company has received a Certificate of Good Standing from the Registrar of Companies which means that it has filed its annual return and paid its annual fees as required to date, failing which might make it liable to be struck off the Register of Companies and thereby cease to exist under the laws of the Cayman Islands.

(d) With respect to this opinion, we have relied upon statements and representations made to us in the Officer’s Certificate provided to us by an authorised officer of the Company for the purposes of this opinion. We have made no independent verification of the matters referred to in the Officer’s Certificate, and we qualify our opinion to the extent that the statements or representations made in the Officer’s Certificate are not accurate in any respect.

(e) Any reference in this opinion to shares being “non-assessable” shall mean, in relation to fully-paid shares of a company and subject to any contrary provision in any agreement in writing between such company and the holder of shares, that: no shareholder shall be obliged to contribute further amounts to the capital of the company, either in order to complete payment for their shares, to satisfy claims of creditors of the company, or otherwise to pay money to the company or to any creditors of the company and no shareholder shall be bound by an alteration of the Memorandum or Articles of Association of the company after the date on which he became a shareholder, if and so far as the alteration requires him to take, or subscribe for additional shares, or in any way increases his liability to contribute to the share capital of the company, or otherwise to pay money to the company or to creditors of the company.

We hereby consent to the use of and filing of this opinion as an exhibit to the Registration Statement and to the references to our firm under the headings “Enforceability of Civil Liabilities”, “Taxation – Cayman Islands Taxation” and “Legal Matters” in the prospectus forming part of the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the SEC promulgated thereunder.

This opinion is governed by and is to be construed in accordance with Cayman Islands law.

Yours faithfully

Appleby

SCHEDULE

1. The Registration Statement on Form F-1 and the Prospectus contained therein, as amended (File No. 333 -        ) as filed by the Company under the Securities Act with the SEC on         .

2. A copy of the Certificate of Incorporation of the Company.

3. A copy of the Amended and Restated Memorandum and Articles of Association of the Company.

4. A copy of the pre-IPO Amended and Restated Memorandum and Articles of Association of the Company (the “Pre-IPO M&A”).

5. A copy of the post-IPO Amended and Restated Memorandum and Articles of Association (the “Post-IPO M&A” and together with the Certificate of Incorporation and the Pre-IPO M&A, the “Constitutional Documents”) as issued by or registered with the Registrar of Companies in the Cayman Islands with all amendments.

6. A Certified copy of the unanimous written resolutions of each of the directors and the shareholders of the Company effective 12 November 2010 (the “Resolutions”).

7. A copy of the Register of Directors and Officers in respect of the Company.

8. A copy of the Register of Members in respect of the Company.

9. A copy of the Register of Mortgages and Charges in respect of the Company.

10. A Certificate of Good Standing dated          in respect of the Company issued by the Registrar of Companies in the Cayman Islands (the “Certificate of Good Standing”).

11. An Officers Certificate (the “Officer’s Certificate”) dated          and signed by         , a Director of the Company.

EX-8.1

EXHIBIT 8.1

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
FOUR TIMES SQUARE NEW YORK 10036-6522 TEL: (212) 735-3000 FAX: (212) 735-2000 www.skadden.com		FIRM/AFFILIATE OFFICES BOSTON CHICAGO HOUSTON LOS ANGELES PALO ALTO SAN FRANCISCO WASHINGTON, D.C. WILMINGTON
Youku.com Inc. 5/F, SinoSteel Plaza, 8 Haidian Street Haidian District Beijing 100080 The People’s Republic of China	,  2010	BEIJING BRUSSELS FRANKFURT HONG KONG LONDON MOSCOW MUNICH PARIS SÃO PAULO SHANGHAI SINGAPORE SYDNEY

Re:  American Depositary Shares of Youku.com Inc. (the “Company”)

Ladies and Gentlemen:

You have requested our opinion concerning the statements in the Registration Statement (as described below) under the caption “Taxation—Material United States Federal Income Tax Considerations” in connection with the public offering on the date hereof of certain American Depositary Shares (“ADSs”), each of which represents ordinary shares, par value $0.00001 per share, of the Company pursuant to the registration statement on Form F-1 under the Securities Act of 1933, as amended (the “Act”), originally filed by the Company with the Securities and Exchange Commission (the “Commission”) on             , 2010 (the “Registration Statement”).

In connection with rendering the opinion set forth below, we have examined and relied on originals or copies of the following:

(a) the Registration Statement; and

(b) such other documents, certificates and records as we have deemed necessary or appropriate as a basis for the opinion set forth below.

Youku.com Inc.

                    , 2010

Page 2

Our opinion is conditioned on the initial and continuing accuracy of the facts, information and analyses set forth in such documents, certificates and records (as identified in clauses (a) and (b) of the immediately preceding paragraph), except for the analyses set forth in the Registration Statement under the caption “Taxation-Material United States Federal Income Tax Considerations.” All capitalized terms used but not otherwise defined herein shall have the respective meanings set forth in the Registration Statement.

For purposes of our opinion, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed, electronic, or photostatic copies, and the authenticity of the originals of such latter documents. We have relied on a representation of the Company that such documents, certificates, and records are duly authorized, valid and enforceable.

In addition, we have relied on factual statements and representations of the officers and other representatives of the Company and others, and we have assumed that such statements and representations are and will continue to be correct without regard to any qualification as to knowledge or belief.

Our opinion is based on the U.S. Internal Revenue Code of 1986, as amended, U.S. Treasury regulations, judicial decisions, published positions of the U.S. Internal Revenue Service, and such other authorities as we have considered relevant, all as in effect as of the date of this opinion and all of which are subject to differing interpretations or change at any time (possibly with retroactive effect). A change in the authorities upon which our opinion is based could affect the conclusions expressed herein. There can be no assurance, moreover, that the opinion expressed herein will be accepted by the U.S. Internal Revenue Service or, if challenged, by a court.

Based upon and subject to the foregoing, we are of the opinion that, under current U.S. federal income tax law, although the discussion set forth in the Registration Statement under the heading “Material United States Federal Income Tax Considerations” does not purport to summarize all possible U.S. federal income tax considerations of the purchase, ownership and disposition of ADSs to U.S. Holders (as defined therein), such discussion constitutes, in all material respects, a fair and accurate summary of the U.S. federal income tax consequences of the purchase, ownership and disposition of the ADSs that are anticipated to be material to U.S. Holders who purchase the ADSs pursuant to the Registration Statement, subject to the qualifications set forth in such discussion.

Except as set forth above, we express no other opinion. This opinion is furnished to you in connection with the sale of the securities. This opinion is expressed as of the date hereof, and we are under no obligation to supplement or revise our opinion to reflect any legal developments or factual matters arising subsequent to the date hereof.

Youku.com Inc.

                    , 2010

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We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name under the caption “Legal Matters” in the prospectus included in the Registration Statement. In giving such consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or the rules or regulations of the Commission promulgated thereunder.

Very truly yours,

EX-8.2

Exhibit 8.2

[Letterhead of TransAsia Lawyers]

[—], 2010

To:	Youku.com Inc. 5/F, SinoSteel Plaza 8 Haidian Street, Haidian District Beijing 100080 People’s Republic of China
Re:	Legal Opinion on PRC Tax Matters

We are lawyers qualified in the People’s Republic of China (the “PRC”, for purposes of this legal opinion, excluding the Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan) and are qualified to issue an opinion on the laws and regulations of the PRC.

We are acting as the PRC counsel for Youku.com Inc. (the “Company”), a company incorporated under the laws the Cayman Islands, in connection with the Company’s Registration Statement on Form F-1, including all amendments or supplements thereto (the “Registration Statement”), publicly filed with Securities and Exchange Commission on [    ] under the U.S. Securities Act of 1933, as amended, relating to the offering by the Company of a certain number of the Company’s American Depositary Shares, each representing [        ] ordinary shares of the Company, par value US$0.00001 per share (“Offering”) by the Company.

A. Documents Examined, Definition and Information Provided

In connection with the furnishing of this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of documents provided by the Company, including the Registration Statement, and such other documents, corporate records, certificates, Approvals (as defined below) and other instruments as we have deemed necessary for the purpose of rendering this opinion, including, without limitation, originals or copies of the certificates issued by PRC government authorities and officers of the Company. All of these documents are hereinafter collectively referred to as the “Documents”.

Unless the context of this opinion otherwise provides, the following terms in this opinion shall have the meanings set forth below:

“Approvals”	means all necessary approvals, consents, waivers, sanctions, certificates, authorizations, filings, registrations, exemptions, permissions, endorsements, annual inspections, qualifications and licenses.
“PRC Laws”	means any and all laws, regulations, statutes, rules, decrees, notices, currently in force and publicly available in the PRC as of the date hereof.

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B. Assumptions

In our examination of the aforesaid Documents, we have assumed, without independent investigation and inquiry that:

1. all signatures, seals and chops are genuine and were made or affixed by representatives duly authorized by the respective parties, all natural persons have the necessary legal capacity, all Documents submitted to us as originals are authentic, and all Documents submitted to us as certified or photo copies conform to the originals; and

2. no amendments, revisions, modifications or other changes have been made with respect to any of the Documents after they were submitted to us for the purposes of this opinion.

In expressing the opinions set forth herein, we have relied upon the factual matters contained in the representations and warranties set forth in the Documents.

C. Opinion

Based upon the foregoing, and subject to the qualifications, assumptions and limitations stated herein and in the Registration Statement, we are of the opinion that:

The statements set forth under the captions “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Regulation”, and “Taxation” in the Registration Statement, insofar as such statements relate to PRC tax law, are accurate in all material respects.

This opinion relates only to PRC Law and we express no opinion as to any laws other than PRC Law. PRC Law as used in this opinion refers to the PRC Laws currently in force as of the date of this opinion. There is no guarantee that any PRC Laws will not be changed, amended or revoked in the immediate or distant future with or without retroactive effect.

We hereby consent to the use of this opinion in, and its being filed as an exhibit to, the Registration Statement. In giving such consent, we do not thereby admit that we fall within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the regulations promulgated thereunder.

Very truly yours,

TransAsia Lawyers

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EX-10.1

Exhibit 10.1

Youku.com Inc.

2006 STOCK OPTION SCHEME

(as amended by the Resolutions of the Board dated March 26^th, 2007, June

20^th , 2008, December 16, 2009 and September 9, 2010)

TABLE OF CONTENTS

Number	Section Heading	Page
1.	DEFINITIONS		1
2.	AVAILABLE SHARES		4
3.	ELIGIBILITY AND PARTICIPATION		4
4.	ADMINISTATION		4
5.	GRANT OF OPTION		5
6.	VESTING OF OPTION		6
7.	EXERCISE OF OPTION		6
8.	SUBSCRIPTION PRICE AND PAYMENT UPON EXERCISE		7
9.	TREATMENT OF OPTIONS IN CERTAIN SITUATIONS		8
10.	REORGANISATION OF CAPITAL STRUCTURE		12
11.	RIGHTS AS A SHAREHOLDER; RESTRICTION ON SHARE TRANSFER		12
12.	ALTERATION AND TERMINATION OF THIS SCHEME		13
13	COSTS AND EXPENSES; TAXES		13
14	DISPUTE RESOLUTION; GOVERNING LAW		13
15.	DISCLAIMERS		14
SCHEDULE A			15
LETTER OF OFFER
SCHEDULE B			16
ACCEPTANCE FORM
SCHEDULE C			18
STOCK OPTION CERTIFICATE (THE “CERTIFICATE”)
SCHEDULE D			19
NOTICE OF EXERCISE
SCHEDULE E			20
DEED OF UNDERTAKING

Youku.com Inc.

2006 STOCK OPTION SCHEME

1. DEFINITIONS

1.1 In this Scheme the following expressions shall have the following meanings:

“Adoption Date”	means December 1, 2005 (the date on which this Scheme is adopted by resolution of the Board of Directors of the Company);
“Affiliates”	with regard to a given person, means a person that controls, is controlled by or is under common control with the given person. For purposes of this Scheme, except as otherwise expressly provided, when used with respect to any person, “control” means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “affiliated”, “controlling” and “controlled” have meanings correlative to the foregoing;
“Applicable Law”	means the legal requirements relating to the Scheme under applicable provisions of the corporate, securities , tax and other laws, rules, regulations and government orders, and the rules of any applicable stock exchange or national market system, of any jurisdiction applicable to the Scheme granted to residents therein;
“Auditors”	mean the Auditors as engaged by the Company;
“Brokerage”	means a brokerage service to handle and finance the exercise of Options granted under this Scheme, as maybe designated by the Company for the Optionees;
“Board”	means the board of directors of the Company or a duly authorised committee thereof;
“Company”	Youku.com Inc., a company incorporated under the laws of the Cayman Islands;
“Consulting Relationship”	means, in respect of Options granted to any Optionee, his relationship with the Company under which the Optionee provides advisory, consulting, accounting, legal, ancillary or other counselling services to the Company, whether in written, contractual form or otherwise and whether entered into in his own capacity or under the name and on behalf of his employer entity;

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	Where such consulting relationship with the Company is entered into in the name, on behalf or for the benefit of the Optionee’s employer entity, “Optionee” as used in the relevant context hereof shall refer to the Optionee’s employer entity, and such terms as “he” or “his” shall be construed accordingly;
“Exercise”	means, in respect of any Option, the act by the Optionee to subscribe the Shares covered by the Option granted to him in accordance with this Scheme;
“Exercisable Date”	means, in respect of any Option, the first date upon which all the conditions listed in Section 7.1 hereof have been satisfied and the Optionee may exercise the relevant part of his Option;
“Grant”	means, in respect of any Option, the incident of such Option being offered to and accepted by the Optionee in accordance with this Scheme;
“Grant Date”	means, in respect of any Option, the date upon which the Option is accepted in accordance with this Scheme;
“Option”	means an option to subscribe for Shares granted pursuant to this Scheme;
“Optionee”	means any employee, officer, director, advisor or consultant of the Company, who accepts the offer of the grant of any Option in accordance with the terms of this Scheme or (where the context so permits) a person entitled to any such Option in consequence of the death of the original person accepting offer of the grant of any Option;
“Option Period”	means, in respect of a particular Option, a period of 10 years commencing from the Grant Date, or such shorter period as the Board may decide at the time of grant, beyond which no Option shall be exercised whatsoever;
“Permitted Transfer”	means the following:
	(a) transfer to the Company;
	(b) transfer by gift to “immediate family” as that term is defined in SEC Rule 16a-1(e) promulgated under the U.S. Securities Exchange Act of 1934, as amended;
	(c) the designation of a beneficiary to receive benefits if the Optionee dies or, if the Optionee has died, transfers to or exercises by the Optionee’s beneficiary, or, in the absence of a validly designated beneficiary, transfers by will or the laws of descent and distribution;
	(d) if the Optionee has suffered a disability, permitted transfers or exercises on behalf of the Optionee by the Optionee’s duly authorized legal representative; or
	(e) subject to the prior approval of the Board or a director or an executive officer of the Company authorized by the Board, transfer to one or more natural persons who are the Optionee’s family members or entities owned and controlled by the Optionee and/or the Optionee’s family members, including but not limited to trusts or other entities whose beneficiaries or beneficial owners are the Optionee and/or the Optionee’s family members, or to such other persons or entities as may be expressly approved by the Board, pursuant to such conditions and procedures as the Board may establish. Any permitted transfer shall be subject to the condition that the Board receives evidence satisfactory to it that the transfer is being made for estate and/or tax planning purposes and on a basis consistent with the Company’s lawful issue of securities.

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	Notwithstanding the foregoing, any transferee of an Option (except for the Company) shall be bound by the terms and conditions under this Scheme and the related Option grant documents;
“IPO”	means the initial public offering and listing of the Shares of the Company on any internationally recognised stock exchange including without limitation the Stock Exchange of Tokyo, JASDAQ, the Stock Exchange of Hong Kong Limited, the Growth Enterprise Market (GEM) of Hong Kong, the New York Stock Exchange, NASDAQ, and the Singapore Stock Exchange;
“Shares”	means ordinary shares of $0.00001 par value each (or of such other nominal amount as shall result from a sub-division or a consolidation of such shares from time to time) of the Company;
“Scheme”	means, subject to Section 12 hereof, this stock option scheme in its present or any amended form, and where the contexts permit, includes the Letter of Offer, Acceptance Form, Option Certificate, Exercise Notice and Deed of Undertaking of or applicable to the relevant Optionee;
“Subscription Price”	means the total price or, where applicable, unit price per Share at which an Optionee may subscribe Shares upon the exercise of an Option, subject to adjustment as provided in this Scheme;
“Subsidiary”	with respect to any corporation, means a company which is for the time being and from time to time being treated as a subsidiary of that corporation under the generally accepted accounting principles applied by that corporation in the preparation of its financial statements;
“$”and “cents”	means United States dollars and cents respectively; and
“Vesting”	means, in respect of any Option, the satisfaction of the vesting schedules and vesting conditions listed in Section 6 hereof. Related terms like “vest”, “vests” and “vested” shall be construed accordingly.

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1.2 Section headings are inserted for convenience of reference only and shall be ignored in the interpretation of this Scheme. References herein to Sections are to Sections of this Scheme. Unless the context requires otherwise, words in the singular shall include the plural and vice versa and references to one gender shall include all genders.

2. AVAILABLE SHARES

2.1 Number of Shares. The Shares subject to the Scheme are of a maximum aggregate number of 140,441,231 ordinary shares of the Company, par value US$0.00001 each. The maximum number of Shares in respect of which Options may be granted under this Scheme, together with Shares covered by Options unvested, Options vested but unexercised (whether exercisable or un-exercisable) and Options exercised, shall not exceed such number.

2.2 Limitation of Share Numbers. To the extent that any Shares subject to the Scheme expires, or lapses for any reason, any Shares subject to the Scheme again be available for the further grant pursuant to the Scheme. To the extent permitted by the Applicable Law, Shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form or combination by the Company or any Affiliates of the Company shall not be counted against Shares available for grant pursuant to the Scheme. Shares delivered by the Optionee or withheld by the Company upon the exercise of any Shares under the Scheme, in payment of the exercise price thereof or tax withholding thereon, may again be optioned, granted or warded hereunder, subject to the limitation of Section 2.1.

2.3 Shares Distributed. Any Shares distributed pursuant to the Scheme may consist, in whole or in part, of authorized unissued Shares, treasury shares (subject to applicable law) or Shares purchased on the open market.

3. ELIGIBILITY AND PARTICIPATION

3.1 Eligibility. Persons eligible to participate in this Scheme may include the following, as may be specially identified by the Board:

(a) employees and officers of the Company;

(b) directors of the Company; and

(c) consultants and advisors of the Company.

3.2 Participation. Subject to the provisions of the Scheme, Board may, from time to time, select from among all eligible individuals, those to whom Shares under the Scheme shall be granted and shall determine the nature and amount of Shares to the granted.

3.3 Jurisdictions. In order to assure the viability of Shares granted to Optionees employed in various jurisdictions, the Board may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom applicable in the jurisdiction in which the Optionee resides or is employed. Moreover, the Board may approve such supplements to, or amendments, restatements, or alternative versions of, the Scheme as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Scheme in effect for any other purpose, provided, however, that no such supplements, amendments, restatements or alternative versions shall increase the share limitation contained in Section 2.1 of the Scheme. Notwithstanding the foregoing, the Board may not take any actions hereunder, and no Shares shall be granted, that would violate any Applicable Laws.

4. ADMINISTRATION

4.1 Board. The Scheme shall be administrated by the Board.

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4.2 Authority of Board. Subject to any specific designation in the Scheme, the Board has the exclusive power, authority and discretion to:

(a) Designate Optionee;

(b) Determine the type of each grant of Shares pursuant to the Scheme to the Optionee;

(c) Determine the number of Shares to be granted;

(d) Determine the terms and conditions of the grant and allotment of Shares pursuant to the Scheme, including but not limited to, the exercise price, grant price, or purchase price, any restriction or limitations on such Shares, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of the grant of Shares, any schedule for the allotment of Shares or deferral of the allotment of Shares, and accelerations or waivers thereof, any provisions related to non-competition and recapture of gain on the grant of the Shares, based in each case on such considerations as the Board in its sole discretion determines;

(e) Determine whether, to what extent, and pursuant to what circumstances the Shares granted pursuant to this Scheme may be settled in, or the exercise price of the Shares may be paid in, cash, Shares, or other property, or the grant of Shares pursuant to this Scheme may be cancelled, forfeited, or surrendered;

(f) Decide all other matters that must be determined in connection with the grant of Shares pursuant to this scheme;

(g) Establish, adopt or revise any rules and regulations as it may deem necessary or advisable to administer this Scheme;

(h) Interpret the terms, and any matter arising pursuant to, this Scheme or any agreement to award Shares pursuant to this Scheme; and

(i) Make all other decisions and determinations that may be required pursuant to this Scheme or as the Board deems necessary or advisable to administer this Scheme.

4.3 Decisions Binding. The Board’s interpretation of the Scheme, any decisions and determinations by the Board related to this Scheme or the grant of Shares pursuant to this Scheme shall be final, binding and conclusive on all parties.

5. GRANT OF OPTION

5.1 Subscription Price. On and subject to the terms of this Scheme, the Board shall be entitled at any time and from time to time within the Scheme Period to offer to grant to any Optionee as the Board may in its absolute sole discretion select, and subject to such conditions as the Board may think fit, an Option to subscribe for such number of Shares at the Subscription Price as the Board may determine.

5.2 Conditions of Exercise. An offer of the grant of an Option shall be made to an Optionee by letter substantially in the form set out in Schedule A, subject to such modification as the Board may from time to time determine, requiring the Optionee to undertake to hold the Option on the terms on which it is to be granted and to be bound by the provisions of this Scheme and shall remain open for acceptance by the Optionee concerned for a period of seven (7) days from the date upon which it is made.

5.3 Acceptance of Grant. An Option shall be deemed to have been granted and accepted when the Acceptance Form is completed, signed and returned by the Optionee to the Company, in or substantially in the form set out in Schedule B, subject to such modification as the Board may from time to time determine.

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5.4 Time of Acceptance. Any offer of the grant of an Option may be accepted in respect of less than the number of Shares in respect of which it is offered. To the extent that the offer of the grant of an Option is not accepted within seven (7) days in the manner indicated in Section 5.3, it shall be deemed to have been irrevocably declined.

5.5 Option Certificate. As soon as possible after the Grant Date, the Board shall issue to the Optionee an Option Certificate substantially in the form of Schedule C, subject to such modification as the Board may from time to time determine.

5.6 Transfer Restriction. An Option, whether vested or not, shall be personal to the Optionee. Except for a Permitted Transfer, neither the Option nor any interest therein may be assignable and no Optionee shall in any way sell, transfer, charge, mortgage, encumber or create any interest in favour of any third party over or in relation to any Option under this Scheme.

6. VESTING OF OPTION

6.1 Vesting Schedule. Subject to other provisions under this Scheme, in respect of any particular Option, the vesting of the Option shall start from the Grant Date and shall follow the schedule below,

(a) One-Sixth (1/6) of the Option shall be vested, upon the first (1^st) anniversary of the Grant Date;

(b) One-twelfth (1/12) of the Option shall be vested, upon the last day of each three (3) month of the second (2^nd) and third (3^rd) year after the Grant Date; and

(c) One-twenty fourth (1/24) of the Option shall be vested, upon the last day of each three(3) month of the fourth (4^th) year after the Grant Date;

for as long as the employment of the Optionee by, membership of the Optionee on the Board of, or Consulting Relationship of the Optionee with the Company, as applicable, continues at the date of vesting without termination, expiry or removal under Section 9 hereof.

6.2 Additional Vesting Schedules. In addition to the vesting schedule provided in Section 6.1 above, the Board may provide additional vesting schedules and vesting conditions in the offer letter to each Optionee, including without limitation performance goals to the achieved and milestone targets to be reached by the Optionee. The acceptance of the Optionee of the offer shall be construed as his acceptance of all the vesting schedules and conditions provided in Section 6.1 and in the offer letter.

7. EXERCISE OF OPTION

7.1 Exercisable Date. The exercise of any Option shall be subject to the following:

(a) vesting of the Option under the Scheme in accordance with Section 6 hereof,

(b) other provisions in respect of exercise of Options under the Scheme or issuance and subscription of Shares in general including without limitation those in Sections 7 (Exercise of Option), 8 (Subscription Price and Payment upon Exercise) and 9 (Treatment of Options in Certain Situations) hereof.

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The first date when all of the conditions in this Section 7.1 have been satisfied is referred to as “Exercisable Date”.

7.2 Exercise of Options. An Option may be exercised in whole or in part by the Optionee (or his or her legal personal representatives) in the following manner:

(a) giving notice in writing to the Company in substantially the form set out in Schedule D (subject to such modification as the Board may from time to time determine) stating that the Option is thereby exercised and the number of Shares in respect of which it is exercised and the form of payment; and

(b) executing and delivering a Deed of Undertaking to the Company in substantially the form set out in Schedule E (subject to such modification as the Board may from time to time determine).

Each exercise notice must be accompanied by a remittance or, with prior consent by the Board, a verification for payment in favour of the Company for the full amount of the total Subscription Price for the Shares in respect of which the notice is given. Within 28 days after receipt of the notice, the Deed of Undertaking and the remittance or payment verification, the Company shall allot the relevant Shares to the Optionee (or his or her legal personal representatives), credited as fully paid.

7.3 Period for Exercise. An Option shall be exercised within the Option Period, after which the Option shall expire and become null and void and may not be exercised either in whole or in part.

8. SUBSCRIPTION PRICE AND PAYMENT UPON EXERCISE

8.1 Payment. Upon exercise of the Option, payment for Shares covered by the Option shall be made on the effective date of such exercise in the following forms:

(a) cash remittance by certified check, bank cashier’s check or wire transfer;

(b) subject to the approval of the Board, in stock of the Company or of other companies that have been owned by the Optionee for at least 6 months prior to the effective date of exercise and valued at their fair market value on the effective date of such exercise as determined at the discretion of the Board, or partly in stock with the balance in cash remittance;

(c) other property acceptable to the Board with a fair market value;

(d) through a Brokerage, if any is made available to the Optionee by the Company and in accordance with Section 8.3 below; or

(e) any combination of the foregoing Section 8.1 (a) to Section 8.1 (d).

8.2 Brokerage. Where the Optionee is not able to pay for the Subscription Price either adopting payment forms in Section 8.1 (a) to (c) above, for example if the Optionee is a citizen of the People’s Republic of China whose exercise of Option is subject to PRC legal restrictions including without limitation those concerning foreign exchange control, the Optionee may adopt the payment form in Section 8.1 (d), for which purpose the Company may designate a Brokerage to finance and handle the exercise of the Option in one of the following ways:

(a) where the Shares subscribed upon exercise is permitted to be sold immediately after subscription, the Brokerage shall pay the Subscription Price, and may sell a portion of the Shares subscribed and use the proceeds from such sale to compensate for the Subscription Price that such Brokerage has paid for the Shares subscribed, or

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(b) where the Shares subscribed upon exercise may not be sold immediately after subscription due to restrictions in connection with the IPO on the assign, transfer, sale, mortgage, encumber, creation of third party interest or disposal of the Shares covered by the Options, the Brokerage shall pay the Subscription Price, and may hold the Shares subscribed as collateral for the compensation for the Subscription Price that the Brokerage has paid and deliver the Shares (or sales proceeds thereof where applicable) to the Optionee after the Brokerage has been fully compensated for the Subscription Price that it has paid for the Shares subscribed and other costs and expenses in connection with the brokerage service, either from the cash dividends in respect of the Shares and/or from the cash proceeds upon sale of all or part of the Shares.

In both cases (a) and (b) above the Optionee may opt for receipt of the net amount of Shares in stock and/or in cash after deduction of the Subscription Price and the costs and expenses for the brokerage service.

The illustration of subscription for Shares using brokerage service in (a) and (b) above are for reference only and is not intended to serve as a definitive or exclusive method by which the subscription of Shares may be structured using brokerage services. The specific method for the subscription of Shares are ultimately subject to the agreement between the Brokerage and the Optionee.

9. TREATMENT OF OPTIONS IN CERTAIN SITUATIONS

9.1 With respect to an Optionee who is an employee (including any officer) of the Company, subject to other provisions in this Scheme,

(a) in the event of the termination of the employment of the Optionee with the Company for any reason other than his death, disability or retirement or for cause, then

(i) Options granted to such Optionee, to the extent that they were vested at the time of such termination, shall be exercised by such Optionee within ninety (90) days following the termination of his/her employment. The Company, however, can extend this ninety (90) day period for selected Optionees as needed, and Options granted to such Optionee, to the extent they were not vested at the time of such termination, shall expire and become null and void at the close of business on the date of such termination,

unless at the time of such termination the Optionee has continuing membership on the Board of the Company or continuing Consulting Relationship with the Company in which case(s) none of the provisions in this Section 9.1(a) shall apply;

(b) in the event that the employment of the Optionee with the Company shall terminate on account of the death, disability or retirement (at the official PRC retirement age) of the Optionee and not for cause, then

(i) Options granted to such Optionee, to the extent that they were vested at the time of such termination or would have become vested had his employment continued for another one (1) year after such termination, shall remain vested or become vested for his or, where applicable, for the benefit of his estate or beneficiary until the expiry of the Option Period, and

(ii) Options granted to such Optionee, to the extent they are not vested at the time of such termination and would not become vested had his employment continued for another one (1) year after such termination, shall expire and become null and void upon such termination.

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(c) In the event of the termination of an Optionee’s employment on any ground

(i) that he has been guilty of wilful misconduct or gross negligence, or has been convicted of any criminal offence involving his integrity or honesty;

(ii) that he has committed an act of bankruptcy or has become insolvent or has made any arrangement or composition with his creditors generally;

(iii) on which an employer would be entitled to terminate his employment for cause pursuant to any applicable laws or provided in the Optionee’s service or employment contract, but excluding termination of the service or employment contract without cause by giving of notice or for expiry of the service or employment contract; or

(iv) that he voluntarily resigns from the Company by notice or departs from the Company without notice, in each case without the prior written consent by the Company or completion of requisite procedures for such resignation/departure,

then all outstanding Options granted to such Optionee, to the extent not exercised, shall expire and become null and void at the close of business on the date of such termination of his employment.

For purpose of this Section 9.1 (c), a resolution of the Board of the Company to the effect that the employment of the Optionee has or has not been terminated on one or more of the grounds specified in this Section 9.1 (c) shall be conclusive in the absence of manifest error.

9.2 With respect to an Optionee as a Director of the Company and not as an employee of the Company, subject to provisions elsewhere in this Scheme,

(a) in the event that the Optionee’s membership on the Board of Directors is terminated because the Optionee resigns from the Board (as consented by the shareholder(s) entitled to appoint the Optionee as Director and the Company) or fails to seek re-election to the Board other than on account of his disability or death or for cause, then

(i) Options granted to such Optionee, to the extent that they were vested at the time of such termination shall remain vested until the expiry of the Option Period, and

(ii) Options granted to such Optionee, to the extent they were not vested at the time of such termination, shall expire and become null and void at the close of business on the date of such termination,

unless at the time of such termination the Optionee has continuing employment or continuing Consulting Relationship with the Company in which case(s) none of the provisions in this Section 9.2(a) shall apply;

(b) in the event that the Optionee’s membership on the Board of Directors is terminated because of his death or disability and other than for cause, then

(i) Options granted to such Optionee, to the extent that they were vested at the time of such termination or would have become vested had his membership on the Board continued for another one (1) year of such termination, shall remain vested or become vested for himself or, where applicable, for the benefit of his estate or beneficiary, until the expiry of the Option Period, and

9

(ii) Options granted to such Optionee, to the extent they are not vested at the time of such termination and would not become vested had his membership continued for another one (1) year of such termination, shall expire and become null and void upon such termination.

(c) In the event that the Optionee is removed from the Board by the shareholders of the Company for any reason including without limitation on the grounds:

(i) that he has been guilty of willful misconduct or gross negligence, or has been convicted of any criminal offence involving his integrity or honesty;

(ii) that he has committed an act of bankruptcy or has become insolvent or has made any arrangement or composition with his creditors generally,

(iii) on which one or more shareholders would be entitled to terminate his membership on the Board employment for cause pursuant to any applicable laws or provided in the by-laws or internal directives of the Company, including without limitation his breach of duty of loyalty and duty of care in discharging his duty as a Director, but excluding termination of the membership without cause by giving of notice or for expiry of his membership term on the Board, or

(iv) that he voluntarily resigns from the Board with notice or depart from his duty on the Board without notice, in each case without prior written consent of the Company and the shareholders entitled to the designation of the Optionee as a Director or completion of requisite procedures for such resignation/departure,

then all outstanding Options granted to such Director, to the extent not exercised, shall expire and become null and void at the close of business on the date of such removal.

For purpose of this Section 9.2 (c), the decision by the one or more shareholders entitled to remove the Optionee from the Board as to whether such removal is justified on the grounds including without limitation those specified in this 9.2 (c), shall be conclusive in the absence of manifest error.

(d) For purpose of this Section 9.2, for avoidance of the conflict of interest, the Optionee shall excuse himself from the Board, and such Optionee shall be excused by the rest of the Board, from any decision regarding the treatment of the Options granted to him.

9.3 With respect to an Optionee as an outside consultant (including advisor, counsel, specialist or the like) and not as an employee or Director of the Company, unless otherwise decided at the sole discretion by the Board of the Company and subject to other provisions of this Scheme:

(a) in the event that the Optionee’s Consulting Relationship with the Company expires without renewal or is terminated for any reason other than specified in Section 9.3(b) and (c) below, then

(i) Options granted to such Optionee, to the extent that they were vested at the time of such expiry or termination, shall remain vested until the expiry of the Option Period, and

(ii) Options granted to such Optionee, to the extent that they were not vested at the time of such termination, shall expire and become null and void at the close of business on the date of such expiry or termination,

10

unless at the time of such termination the Optionee has continuing employment with the Company or continuing membership on the Board of the Company in which case(s) none of the provisions in this Section 9.3 (a) shall apply;

(b) in the event that the Optionee’s Consulting Relationship with the Company is terminated because of the Optionee’s disability, death, or loss of competence, capacity, qualification, permission or approval that are necessary for the full discharge of the Optionee’s obligations under the Consulting Relationship with the Company, or due to Force Majeure, in each instance without any of the situation in Section 9.3 (c) below, and except where the maintenance of such competence, capacity, qualification, permission or approval is the obligation of such Optionee under his Consulting Relationship with the Company, then

(i) Options granted to such Optionee, to the extent that they were vested at the time of termination or would have become vested had the Consulting Relationship with the Company continued for another one (1) year of such termination, shall remain vested or become vested for himself or, where applicable, for the benefit of his estate or beneficiary, until the expiry of the Option Period, and

(ii) Options granted to such Optionee, to the extent they are not vested at the time of termination and would not become vested had his Consulting Relationship with the Company continued for another one (1) year of such termination, shall expire and become null and void upon such termination.

(c) In the event that the Consulting Relationship of the Optionee with the Company is either voluntarily terminated by the Optionee without prior consent of the Company or terminated by the Company on one or more of the following grounds:

(i) that he has committed wilful misconduct or gross negligence, or has been convicted of any criminal offence involving his integrity or honesty;

(ii) that he has committed an act of bankruptcy or has become insolvent or has made any arrangement or composition with his creditors generally; or

(iii) on which the Company would be entitled to terminate the Consulting Relationship pursuant to any applicable laws or as provided in the contract or other documents governing such Consulting Relationship, including without limitation his material breach of, failure to discharge his obligation under, or other default of his contract with the Company in connection with the Consulting Relationship;

then all outstanding Options granted to such Optionee, to the extent not exercised, shall expire and become null and void at the close of business on the date of such termination.

For purpose of this Section 9.3 (c), unless otherwise provided in the agreement governing the Consulting Relationship, the decision by the Company as to whether such termination is justified on the grounds including without limitation those specified in this 9.3 (c) shall be conclusive in the absence of manifest error.

9.4 Notwithstanding anything to the contrary in this Scheme or in the offer letter of the Option at the time of grant, and regardless of the status of the relationship between the Optoinee and the Company, in the event where the Optionee:

(a) has committed any fraudulence or deceit or satisfaction of vesting schedule or vesting conditions, or on the payment of subscription price in full,

(b) has breached Section 5.6 hereof regarding restrictions on transfer of Options, or

11

(c) has failed to perform, observe or comply with fully and in a timely manner any undertakings, obligations, agreements, conditions, or arrangements in relation to confidentiality, non-solicitation, non-competition or of similar nature, whether before or after termination of his employment by, membership on the Board of, or Consulting Relationship with the Company in accordance with their respective terms, regardless of whether or not such undertakings, obligations, agreements, conditions, or arrangements has been voided, avoided or rendered unenforceable in any way or to any extent,

then all outstanding Options granted to such Optionee, to the extent not exercised, shall expire and become null and void immediately upon finding of such incidents in (a) (b) and (c) above, for which purpose the decision by the Board (in the case of the Optionee as an employee of the Company) or the entitled shareholders (in the case of the Optionee as a Director of the Company) or otherwise by the Company (in the case of the Optionee as a consultant of the Company) shall be conclusively final and binding.

10. REORGANISATION OF CAPITAL STRUCTURE

In the event of any alteration in the capital structure of the Company whilst any Option remains outstanding (whether vested or unvested, exercisable or unexercisable), whether by way of capitalisation of profits or reserves, rights issue, consolidation, subdivision or reduction of the share capital of the Company (other than an issue of Shares as consideration in respect of a transaction to which the Company is a party), such corresponding alterations (if any) shall be made in:

i. the number of Shares subject to the Option so far as unexercised;

ii. the Subscription Price; and/or

iii. the vesting conditions and method of exercise of the Option,

as the Auditors shall certify in writing to the Board to be in their opinion fair and reasonable, provided that any alteration shall be made on the basis that the proportion of the issued share capital of the Company to which a Optionee is entitled after such alteration shall remain the same as that to which he was entitled before such alteration, but so that no such alteration shall be made the effect of which would be to enable any Share to be issued at less than its par value. The capacity of the Auditors in this Section 10 is that of experts and not of arbitrators and their certification shall be for reference by the Board.

11. RIGHTS AS A SHAREHOLDER; RESTRICTION ON SHARE TRANSFER

11.1 Rights as Shareholders. The Shares to be allotted upon the exercise of an Option will be subject to all the provisions of the Memorandum and Articles of Association of the Company for the time being in force and will rank pari passu with the fully paid Shares in issue on the date of allotment and accordingly will entitle the holders to all rights, powers, interests or benefits including without limitation participation in all dividends or other distributions paid or made on or after the date of allotment other than any dividend or other distribution previously declared or recommended or resolved to be paid or made with respect to a record date which shall be before the date of allotment.

11.2 Restriction on Share Transfer. Without prejudice to any restrictions on the transfer of Shares as may from time to time be contained in the Memorandum and Articles of Association of the Company and subject to Section 5.6 of this Scheme, the Optionee shall not sell, transfer, charge, mortgage, encumber or create any interest in favour of any third party over or in relation to any Shares that may be allotted to him pursuant to the exercise of an Option without the prior written approval of the Board, and the Board may approve or disapprove any such sale, transfer, change, mortgage, encumbrance or creation of interest at its sole and absolute discretion without assigning any reason therefor.

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12. ALTERATION AND TERMINATION OF THIS SCHEME

12.1 Alteration. Subject to Section 12.2, this Scheme may be altered in any respect by resolution of the Board except that the provisions of this Scheme as to

(a) the definitions of “Optionee”, “Vesting”, “Option Period” and “Scheme Period” and

(b) provisions hereunder concerning procedures of offer and acceptance of Options, vesting and exercise of Options, determination of Subscription Price, treatment of options in certain situations, maximum number of shares available for Options under this Scheme, and reorganisation of the capital structure of the Company,

shall not be altered to the advantage of Optionees or prospective Optionees except with the prior sanction of an ordinary resolution of the shareholders of the Company.

12.2 Alternation for IPO. Notwithstanding anything herein contained, in the event of a IPO of the Company, this Scheme may be altered by an ordinary resolution of the shareholders of the Company as necessary for this Scheme to comply with the rules, requirements or requests of the government authority, stock exchange, underwriter or transacting parties involved in or in relation to the IPO provided that no such alternation shall deprive or reduce the rights, benefits and entitlements of the Optionees in respect of Options granted (whether vested or unvested, exercisable or unexercisable) without compensation to be certified by the Auditors in writing to the Company to be in their opinion fair and reasonable. The capacity of the Auditors for the said purpose is that of experts and not of arbitrators and their certification shall be for the reference by the Board.

12.3 Termination. Without prejudice to other provisions in this Scheme, the Company by an ordinary resolution of the shareholders or the Board may at any time terminate the operation of this Scheme before the expiry of the Scheme Period and in such event no further Options will be offered but the provisions of this Scheme shall remain in force in all other respects.

13 COSTS AND EXPENSES; TAXES

13.1 The costs and expenses in connection with the general establishment and administration of this Scheme shall be borne by the Company.

13.2 Notwithstanding the foregoing, all costs, expenses, fees, taxes, levies or charges in connection with the exercise of the Option granted to an Optionee and the sale of Shares covered by such Option shall be borne by the Optionee. For such purpose, the Company reserves the absolute right, and the Optionee shall give irrevocable authorization to the Company upon acceptance of the Option for the Company, to take any necessary actions, including without limitation deduction, withholding, offsetting or retaining of appropriate amount from the value of the Shares issued to the Optionee under the Scheme, in order for the payment of any such costs, expenses, fees, taxes, levies or charges, or to otherwise comply with relevant statutory or administrative requirements.

14 DISPUTE RESOLUTION; GOVERNING LAW

14.1 Arbitration. Any dispute arising in connection with this Scheme and any Options granted hereunder shall be referred to the decision of China International Economic and Trade Arbitration Commission (“CIETAC”) in Beijing in accordance with its arbitration rules.

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14.2 Governing Law. This Scheme and all Options granted hereunder shall be governed by and construed in accordance with the laws of New York State.

15. DISCLAIMERS

15.1 An Optionee, solely in his capacity as Optionee, shall not be entitled to receive copies of any notices and other documents sent by the Company to holders of Shares.

15.2 Any notice or other communication between the Company and a Optionee may be given by sending the same by prepaid post or by personal delivery to, in the case of the Company, 5th Floor, Sinosteel Plaza, 8 Haidian Street, Haidian District, Beijing, China, 100080 or as notified to the Optionees from time to time and, in the case of the Optionee, his address as last maintained in his personnel record with the Company.

15.3 Any notice or other communication served by post:

(a) by the Company shall be deemed to have been served 48 hours after the same was put in the post; and

(b) by the Optionee shall not be deemed to have been received until the same have actually been received by the Company.

15.4 An Optionee shall be responsible for obtaining any governmental or other official consent that may be required by any country or jurisdiction in order to permit the grant or exercise of the Option. Unless otherwise agreed by the Board, the Company shall not be responsible for any failure by an Optionee to obtain any such consent or for any tax or other liability to which an Optionee may become subject as a result of his or her participation in this Scheme, all of which shall be the sole responsibility of the Optionee.

15.5 Participation in this Scheme by an Optionee shall be a matter entirely separate from any pension right or entitlement he may have and from his terms or conditions of employment by, membership on the Board of or Consulting Relationship with the Company. In particular (but without limiting the generality of the foregoing) any Optionee or Optionee who terminates his relationship with the Company for any reason whatsoever shall not be entitled to any compensation for any loss of any right or benefit or prospective right or benefit under this Scheme which he might otherwise have enjoyed whether such compensation is claimed by way of damages for wrongful dismissal or breach of contract or by way of compensation for loss of office or otherwise howsoever.

15.6 Nothing contained in this Scheme shall confer upon any Optionee any right with respect to the continuation of his employment by, membership on the Board of or Consulting Relationship with the Company or interfere in any way with the right of the Company at any time to terminate such relationship or to increase or decrease the compensation of the Optionee.

15.7 No person, whether as a current, past or prospective employee, officer, Director, consultant or advisor shall have any claim or right to receive Options under this Scheme. The Board’s granting of an Option to an Optionee at any time shall neither require the Board to grant to such Optionee or any other person at any time nor preclude the Board from making subsequent grants to such Optionee or any other person.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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SCHEDULE A

LETTER OF OFFER

[Optionee’s Name and Position]	PRIVATE AND CONFIDENTIAL
[Optionee’s Address]

[Date]

Dear [Optionee’s Name],

The Board of Directors of Youku.com Inc. (the “Company”) would like to invite you to participate in the 2006 Stock Option Scheme of the Company (the “Scheme”). The terms used in this letter shall have the same meaning given to them in the Scheme and the rules of construction contained in the Scheme shall apply to this Letter of Offer.

Accordingly, an offer is hereby made to grant you an Option to subscribe for and be allotted [  ] Shares of US$0.00001 par value each in the capital of the Company at the Subscription Price of US$ [  ] per Share. The Option shall be subject to the terms and conditions of this Letter of Offer and the Scheme (as the same may be amended from time to time pursuant to the terms and conditions of the Scheme), a copy of which is enclosed herewith.

The Option Period shall be [  ] and the Option may be exercised during the Option Period in accordance with the vesting schedule and vesting conditions as prescribed in the here below and subject to other provision in the Scheme:

No. of Shares Vested Vesting Schedule Vesting Conditions

The Option is personal to you and may not be sold, mortgaged, transferred, charged, assigned, pledged or otherwise disposed of, or encumbered in whole or in part or in any way whatsoever without prior written consent by the Company.

If you wish to accept the offer, please sign and return the enclosed Acceptance Form not later than              a.m./p.m. on                                  failing which this offer will forthwith lapse.

Yours faithfully

For and on behalf of

Youku.com Inc.

Name: Victor Koo

Designation:

15

SCHEDULE B

ACCEPTANCE FORM

To: Board of Directors

Youku.com Inc.

Dear Sir,

I have read your Letter of Offer dated [  ] (the “Offer Date”) and agree to be bound by the terms and conditions thereof and of the 2006 Stock Option Scheme (the “Scheme”) of Youku.com Inc. (the “Company”) enclosed therewith. The terms used in this Acceptance Form shall have the same meaning given to them in the Scheme and the rules of construction contained in the Scheme shall apply to this Acceptance Form. I confirm that my acceptance of the Option will not result in the contravention of any applicable law or regulation in relation to the ownership of Shares in the Company or Options to subscribe for such Shares.

I hereby accept the Option to subscribe for [  ] Shares of US$0.00001 par value each in the capital of the Company at the Subscription Price of US$ [  ] per Share. I hereby further acknowledge that you have not made any representation or warranty or given me any expectation of new or continued employment by, membership on the Board of or Consulting Relationship with the Company, whichever is applicable, to induce me to accept the offer and that the terms of the Letter of Offer and this Acceptance Form constitute the entire agreement between us relating to the offer.

I agree to keep all information pertaining to the grant of the Option to me confidential.

Any action taken or decision made by the Company, the Board, or its delegates arising out of or in connection with the construction, administration, interpretation or effect of the Scheme or this Acceptance Form shall lie within its sole and absolute discretion, as the case may be, and shall be final, conclusive and binding on me. By accepting this grant or other benefit under the Scheme, I shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken under the Scheme by the Company, the Board or its delegates.

I acknowledge: (i) that the Scheme is discretionary in nature and may be suspended or terminated by the Company at any time; (ii) that the grant of the Options under the Scheme is a one-time benefit which does not create any contractual or other right to receive future grants of Options, or benefits in lieu of options; (iii) that all determinations with respect to any such future grants, including, but not limited to, the times when rights shall be granted, the Subscription Price, and the time or times when each right shall be exercisable, will be at the sole discretion of the Company; (iv) that my participation in the Scheme is voluntary; (v) that the value of the Option is an extraordinary item of compensation which is outside the scope of my employment by, membership on the Board of or Consulting Relationship with the Company, whichever is applicable; (vi) that the Option is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (vii) that the right to purchase Shares ceases upon termination of employment by, membership on the Board of or Consulting Relationship with the Company and other situations described in the Scheme and in the offer letter to him, whichever is applicable, for any reason except as may otherwise be explicitly provided in the Scheme or in the offer letter; (viii) that the future value of the Shares purchased under the Scheme is unknown and cannot be predicted with certainty; and (ix) that if the underlying Shares do not increase in value, the Option will have no value.

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As a condition of the grant of the Option, I consent to the collection, use and transfer of personal data as described in this paragraph. I understand that the Company would hold certain personal information about me, including but not limited to my name, home address and telephone number, date of birth, identification document number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Options or any other entitlement to Shares awarded, cancelled, exercised, vested, unvested or outstanding in my favour, for the purpose of managing and administering the Scheme (“Data”). I further understand that the Company will transfer Data amongst themselves for purposes of implementation, administration and management of my participation in the Scheme, and the Company may each further transfer Data to any third parties assisting the implementation, administration and management of the Scheme and who has a duty of confidentiality to the Company. I understand that these recipients may be located in Beijing or other overseas places. I authorise them to receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administering and managing our participation in the Scheme, as may be required for the administration of the Scheme and/or the subsequent holding of Shares on my behalf. I understand that I may, at any time, view Data, require any necessary and accurate amendments to it or withdraw the consent herein in writing by contacting the designated officer of the Company I understand that if I withdraw the consent herein the Company is entitled to terminate my participation in the Scheme.

PLEASE PRINT IN BLOCK LETTERS

Name in full	:
Designation	:

Address :

Nationality	:
Passport (or ID) No.	:
Signature	:
Date	:

Notes:

This Acceptance Form must be forwarded to the Company in an envelope marked “Private and Confidential”.

17

SCHEDULE C

STOCK OPTION CERTIFICATE (THE “CERTIFICATE”)

of

Youku.com Inc. (the “Company”)

for the benefit of

[name of the Optionee] (the “Optionee”)

OPTION CERTIFICATE NUMBER

[    ]

DATE OF GRANT

[    ]

NUMBER OF ORDINARY SHARES, AT US$ 0.00001 PAR VALUE EACH

[    ]

SUBSCRIPTION PRICE PER ORDINARY SHARE

[    ]

THIS IS TO CERTIFY that, on the date shown above, the under-mentioned was granted, subject to and with the benefit of the rules of the Company’s 2006 Stock Option Scheme (the “Scheme”), an option to acquire at the price shown above the number of ordinary shares in the Company, subject to the Memorandum and Articles of Association of the Company (the “Option”). The Option is personal to the Optionee named in this Certificate and may not be transferred, assigned or charged without the prior written consent of the Company.

This Option may be exercised (a) subject to the vesting schedule and vesting conditions as set out in the Option; and (b) subject to and within the vesting schedule and other terms and conditions specified in the Scheme by completing the notice in the form as Schedule D attached to the Scheme and sending or delivering it to [name of the Optionee] at the address below.

Name of the Optionee

[            ]

THE COMMON SEAL of Youku.com Inc.

Was affixed in the presence of:

[Director]

[Secretary]

THIS CERTIFICATE IS IMPORTANT AND SHOULD BE KEPT IN A SAFE PLACE AS IT WILL BE REQURESTED UPON YOUR EXERCISE OF THE OPTION

18

SCHEDULE D

NOTICE OF EXERCISE

The Board of Directors

Youku.com Inc.

                                 ,

Cayman Islands

Attn: Company Secretary

Dear Sir,

Re: Exercise of Stock Option

I, [  ](Name), hereby exercise [all] [part] of my Option in the Youku.com Inc. (the “Company”) Stock Option Scheme (the “Scheme”) and enclose my remittance for the aggregate Subscription Price for the relevant Shares as follows:

Number of Shares subject

to Option granted :

Number of Shares subscribed for:

Subscription Price:	US$
(per Share)
Subscription Price:	US$
(total)

Payment Form:	(  )	Cash remittance
	(  )	Cashless subscription (through Brokerage)
	(  )	Stock swap
	(  )	Property

I enclose for your record a Deed of Undertaking in the prescribed form and a remittance or (as consented by the Board) a verification for payment.

Signature of Optionee Date

19

SCHEDULE E

DEED OF UNDERTAKING

THIS DEED OF UNDERTAKING is made this [  ] day of [  ]

BY [  ], holder of [  ] (Passport No. [  ] Personal Identification Number [  ]) (the “Optionee”) IN FAVOUR OF Youku.com Inc., a company incorporated under the laws of the Cayman Islands (the “Company”).

WHEREAS the Company has established the Scheme and has granted Option to the Optionee. It is a condition for the Optionee exercising the Option to execute and deliver this Deed in favour of the Company.

NOW THIS DEED WITNESSES as follows:

1. Interpretation

Unless the context requires otherwise,

(a) “Scheme” means the stock option scheme of the Company adopted by resolution of the Board of the Company on December 1, 2005, in its present or any amended form;

(b) the terms used in this Deed shall have the same meaning given to them in the Scheme; and

(c) the rules of construction contained in the Scheme shall apply to this Deed.

2. Undertaking

The Optionee hereby unconditionally and irrevocably undertakes and covenants to the Company that the Optionee will:

(a) at the cost of the Company, take all necessary actions, do all necessary things and execute all necessary documents as the Company may from time to time require for the preparation, implementation and execution of any plan or scheme for a IPO, including but not limited to transferring any or all Shares owned by or registered in the name of the Optionee to another entity in exchange for the securities of that entity which are or may become listed securities through the IPO;

(b) agree to and accept such terms and conditions for the IPO as the Board of Directors of the Company may approve, including but not limited to the price for the issue or sale of the Shares or securities resulting from the IPO and the number of Shares or securities to be issued or sold; and

(c) without limiting the generality of Paragraph (b) above, agree to and comply with such restriction on disposal of the Shares or securities resulting from the IPO as the exchange (on which the Shares or resulting securities will be listed) or the financial advisor, sponsor or underwriters of the IPO may require.

3. Authorization

The Optionee hereby unconditionally and irrevocably authorizes the Company to take all necessary actions, do all necessary things and execute all necessary documents and deeds as the Company shall think fit in the name and on behalf of the Optionee to fulfill the obligations of the Optionee under this Deed in the event that the Optionee fails to perform any such obligations fully and punctually.

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4. Term

This Deed shall commence from the date hereof and shall remain in full force and effect until completion of the IPO of the Company.

5. Binding Effect

This Deed shall be binding on the personal representative of the Optionee.

6. General

Sections Dispute Resolution, Governing Law and Disclaimers of the Scheme shall apply to this Deed mutatis mutandis.

IN WITNESS the Optionee has executed this Deed the day and year first above written.

SIGNED SEALED and DELIVERED	)
by	)
In the presence of:	)

21

EX-10.2

Exhibit 10.2

YOUKU.COM INC.

2010 SHARE INCENTIVE PLAN

ARTICLE 1

PURPOSE

The purpose of the Youku.com Inc. 2010 Share Incentive Plan (the “Plan”) is to promote the success and enhance the value of Youku.com Inc., a company formed under the laws of the Cayman Islands (the “Company”) by linking the personal interests of the members of the Board, Employees, and Consultants to those of the Company’s shareholders and by providing such individuals with an incentive for outstanding performance. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees and Consultants upon whose judgment and contribution the Company’s business is largely dependent.

ARTICLE 2

DEFINITIONS AND CONSTRUCTION

Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.

2.1 “Applicable Laws” means the legal requirements relating to the Plan and the Awards under applicable provisions of the corporate, securities, tax and other laws, rules, regulations and government orders, and the rules of any applicable stock exchange or national market system, of any jurisdiction applicable to Awards granted to residents therein.

2.2 “Award” means an Option, Restricted Share or Restricted Share Unit award granted to a Participant pursuant to the Plan.

2.3 “Award Agreement” means any agreement, contract, or other instrument or document, in writing or through electronic medium, evidencing an Award, including an Option Award Agreement, a Restricted Shares Award Agreement or a Restricted Share Units Award Agreement, each as defined herein.

2.4 “Board” means the Board of Directors of the Company.

2.5 “Code” means the Internal Revenue Code of 1986 of the United States, as amended.

2.6 “Committee” means a committee of the Board described in Article 10.

2.7 “Consultant” means any consultant or adviser if: (a) the consultant or adviser renders bona fide services to a Service Recipient; (b) the services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities; and (c) the consultant or adviser is a natural person who has contracted directly with the Service Recipient to render such services.

2.8 “Corporate Transaction”, unless otherwise defined in an Award Agreement, means any of the following transactions, provided, however, that the Committee shall determine under (d) and (e) whether multiple transactions are related, and its determination shall be final, binding and conclusive:

(a) an amalgamation, arrangement or consolidation or scheme of arrangement (i) in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the jurisdiction in which the Company is incorporated or (ii) following which the holders of the voting securities of the Company do not continue to hold more than 50% of the combined voting power of the voting securities of the surviving entity;

(b) the sale, transfer or other disposition of all or substantially all of the assets of the Company;

(c) the complete liquidation or dissolution of the Company;

(d) any reverse takeover or series of related transactions culminating in a reverse takeover (including, but not limited to, a tender offer followed by a reverse takeover) in which the Company is the surviving entity but (A) the Company’s equity securities outstanding immediately prior to such takeover are converted or exchanged by virtue of the takeover into other property, whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such takeover or the initial transaction culminating in such takeover, but excluding any such transaction or series of related transactions that the Committee determines shall not be a Corporate Transaction; or

(e) acquisition in a single or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but excluding any such transaction or series of related transactions that the Committee determines shall not be a Corporate Transaction.

2.9 “Disability”, unless otherwise defined in an Award Agreement, means that the Participant qualifies to receive long-term disability payments under the Service Recipient’s long-term disability insurance program, as it may be amended from time to time, to which the Participant provides services regardless of whether the Participant is covered by such policy. If the Service Recipient to which the Participant provides service does not have a long-term disability plan in place, “Disability” means that a Participant is unable to carry out the responsibilities and functions of the position held by the Participant by reason of any medically determinable physical or mental impairment for a period of not less than ninety (90) consecutive days. A Participant will not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Committee in its discretion.

2

2.10 “Effective Date” shall have the meaning set forth in Section 11.1.

2.11 “Employee” means any person, including an officer or a member of the Board of the Company or any Parent or Subsidiary of the Company, who is in the employment of a Service Recipient, subject to the control and direction of the Service Recipient as to both the work to be performed and the manner and method of performance. The payment of a director’s fee by a Service Recipient shall not be sufficient to constitute “employment” by the Service Recipient.

2.12 “Exchange Act” means the Securities Exchange Act of 1934 of the United States, as amended.

2.13 “Fair Market Value” means, as of any date, the value of Shares determined as follows:

(a) If the Shares are listed on one or more established stock exchanges or national market systems, including without limitation, The New York Stock Exchange, its Fair Market Value shall be the closing sales price for such Shares (or the closing bid, if no sales were reported) as quoted on the principal exchange or system on which the Shares are listed (as determined by the Committee) on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Committee deems reliable;

(b) If the Shares are regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value shall be the closing sales price for such shares as quoted on such system or by such securities dealer on the date of determination, but if selling prices are not reported, the Fair Market Value of a Share shall be the mean between the high bid and low asked prices for the Shares on the date of determination (or, if no such prices were reported on that date, on the last date such prices were reported), as reported in The Wall Street Journal or such other source as the Committee deems reliable; or

(c) In the absence of an established market for the Shares of the type described in (a) and (b), above, the Fair Market Value thereof shall be determined by the Committee in good faith and in its discretion by reference to (i) the placing price of the latest private placement of the Shares and the development of the Company’s business operations and the general economic and market conditions since such latest private placement, (ii) other third party transactions involving the Shares and the development of the Company’s business operation and the general economic and market conditions since such sale, (iii) an independent valuation of the Shares, or (iv) such other methodologies or information as the Committee determines to be indicative of Fair Market Value.

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2.14 “Incentive Share Option” means an Option that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto.

2.15 “Independent Director” means a member of the Board who is a Non-Employee Director and who meets the standards of independence under The New York Stock Exchange or other applicable stock exchanges where the Company’s Shares are listed.

2.16 “Non-Employee Director” means a member of the Board who qualifies as a “Non-Employee Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor definition adopted by the Board.

2.17 “Non-Qualified Share Option” means an Option that is not intended to be an Incentive Share Option.

2.18 “Option” means a right granted to a Participant pursuant to Article 5 of the Plan to purchase a specified number of Shares at a specified price during specified time periods. An Option may be either an Incentive Share Option or a Non-Qualified Share Option.

2.19 “Participant” means a person who, as a member of the Board, Consultant or Employee, has been granted an Award pursuant to the Plan.

2.20 “Parent” means a parent corporation under Section 424(e) of the Code.

2.21 “Permitted Transfer” means the following:

(a) transfer to the Company or a Subsidiary;

(b) transfer by gift to “immediate family” as that term is defined in SEC Rule 16a-1(e) promulgated under the U.S. Securities Exchange Act of 1934, as amended;

(c) the designation of a beneficiary to receive benefits if the Participant dies or, if the Participant has died, transfers to or exercises by the Participant’s beneficiary, or, in the absence of a validly designated beneficiary, transfers by will or the laws of descent and distribution;

(d) if the Participant has suffered a disability, permitted transfers or exercises on behalf of the Participant by the Participant’s duly authorized legal representative; or

(e) subject to the prior approval of the Committee, transfer to one or more natural persons who are the Participant’s family members or entities owned and controlled by the Participant and/or the Participant’s family members, including but not limited to trusts or other entities whose beneficiaries or beneficial owners are the Participant and/or the Participant’s family members, or to such other persons or entities as may be expressly approved by the Committee, pursuant to such conditions and procedures as the Committee may establish.

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2.22 “Plan” means this Youku.com Inc. 2010 Share Incentive Plan, as it may be amended from time to time.

2.23 “Related Entity” means any business, corporation, partnership, limited liability company or other entity in which the Company, a Parent or Subsidiary of the Company holds a substantial ownership interest, directly or indirectly, but which is not a Subsidiary and which the Board designates as a Related Entity for purposes of the Plan.

2.24 “Restricted Share” means a Share awarded to a Participant pursuant to Article 6 that is subject to certain restrictions and may be subject to risk of forfeiture.

2.25 “Restricted Share Unit” means the right granted to a Participant pursuant to Article 7 to receive a Share at a future date.

2.26 “Securities Act” means the Securities Act of 1933 of the United States, as amended.

2.27 “Service Recipient” means the Company, any Parent or Subsidiary of the Company and any Related Entity to which a Participant provides services as an Employee, a Consultant or a Director.

2.28 “Share” means Class A Ordinary Shares, par value US$0.00001 per share, of the Company, and such other securities of the Company that may be substituted for Shares pursuant to Article 9.

2.29 “Subsidiary” means any corporation or other entity of which a majority of the outstanding voting shares or voting power is beneficially owned directly or indirectly by the Company.

2.30 “Trading Date” means the closing of the first sale to the general public of the Shares pursuant to a registration statement filed with and declared effective by the U.S. Securities and Exchange Commission under the Securities Act.

ARTICLE 3

SHARES SUBJECT TO THE PLAN

3.1 Number of Shares.

(a) Subject to the provisions of Article 9 and Section 3.1(b), the maximum aggregate number of Shares which may be issued pursuant to all Awards (including Incentive Share Options) shall be 100,000,000.

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(b) To the extent that an Award terminates, expires, or lapses for any reason, any Shares subject to the Award shall again be available for the grant of an Award pursuant to the Plan. To the extent permitted by Applicable Laws, Shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form or combination by the Company or any Parent or Subsidiary of the Company shall not be counted against Shares available for grant pursuant to the Plan. Shares delivered by the Participant or withheld by the Company upon the exercise of any Award under the Plan, in payment of the exercise price thereof or tax withholding thereon, may again be optioned, granted or awarded hereunder, subject to the limitations of Section 3.1(a). If any Restricted Shares are forfeited by the Participant or repurchased by the Company, such Shares may again be optioned, granted or awarded hereunder, subject to the limitations of Section 3.1(a). Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action would cause an Incentive Share Option to fail to qualify as an incentive Share option under Section 422 of the Code.

3.2 Shares Distributed. Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares, treasury shares (subject to Applicable Laws) or Shares purchased on the open market. Additionally, in the discretion of the Committee, American Depository Shares in an amount equal to the number of Shares which otherwise would be distributed pursuant to an Award may be distributed in lieu of Shares in settlement of any Award. If the number of Shares represented by an American Depository Share is other than on a one-to-one basis, the limitations of Section 3.1 shall be adjusted to reflect the distribution of American Depository Shares in lieu of Shares.

ARTICLE 4

ELIGIBILITY AND PARTICIPATION

4.1 Eligibility. Persons eligible to participate in this Plan include Employees, Consultants, and all members of the Board, as determined by the Committee.

4.2 Participation. Subject to the provisions of the Plan, the Committee may, from time to time, select from among all eligible individuals, those to whom Awards shall be granted and shall determine the nature and amount of each Award. No individual shall have any right to be granted an Award pursuant to this Plan.

4.3 Jurisdictions. In order to assure the viability of Awards granted to Participants employed in various jurisdictions, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom applicable in the jurisdiction in which the Participant resides or is employed. Moreover, the Committee may approve such supplements to, or amendments, restatements, or alternative versions of, the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect for any other purpose; provided, however, that no such supplements, amendments, restatements, or alternative versions shall increase the share limitations contained in Section 3.1 of the Plan. Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate any Applicable Laws.

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ARTICLE 5

OPTIONS

5.1 General. The Committee is authorized to grant Options to Participants on the following terms and conditions:

(a) Exercise Price. The exercise price per Share subject to an Option shall be determined by the Committee and set forth in the Option Award Agreement which may be a fixed or variable price related to the Fair Market Value of the Shares. The exercise price per Share subject to an Option may be amended or adjusted in the absolute discretion of the Committee, the determination of which shall be final, binding and conclusive. For the avoidance of doubt, to the extent not prohibited by Applicable Laws or any exchange rule, a downward adjustment of the exercise prices of Options mentioned in the preceding sentence shall be effective without the approval of the Company’s shareholders or the approval of the affected Participants.

(b) Time and Conditions of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, including exercise prior to vesting; provided that the term of any Option granted under the Plan shall not exceed ten years, except as provided in Section 12.1. The Committee shall also determine any conditions, if any, that must be satisfied before all or part of an Option may be exercised.

(c) Payment. The Committee shall determine the methods by which the exercise price of an Option may be paid, the form of payment, including, without limitation (i) cash or check denominated in U.S. Dollars, (ii) to the extent permissible under the Applicable Laws, cash or check in Chinese Renminbi, (iii) cash or check denominated in any other local currency as approved by the Committee, (iv) Shares held for such period of time as may be required by the Committee in order to avoid adverse financial accounting consequences and having a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof, (v) after the Trading Date the delivery of a notice that the Participant has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price; provided that payment of such proceeds is then made to the Company upon settlement of such sale, (vi) other property acceptable to the Committee with a Fair Market Value equal to the exercise price, or (vii) any combination of the foregoing. Notwithstanding any other provision of the Plan to the contrary, no Participant who is a member of the Board or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to pay the exercise price of an Option in any method which would violate Section 13(k) of the Exchange Act.

(d) Evidence of Grant. All Options shall be evidenced by an Option Award Agreement between the Company and the Participant. The Option Award Agreement shall include such additional provisions as may be specified by the Committee.

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5.2 Incentive Share Options. Incentive Share Options may be granted to Employees of the Company, a Parent or Subsidiary of the Company. Incentive Share Options may not be granted to Employees of a Related Entity or to Independent Directors or Consultants. The terms of any Incentive Share Options granted pursuant to the Plan, in addition to the requirements of Section 5.1, must comply with the following additional provisions of this Section 5.2:

(a) Expiration of Option. An Incentive Share Option may not be exercised to any extent by anyone after the first to occur of the following events:

(i) Ten years from the date it is granted, unless an earlier time is set in the Award Agreement;

(ii) 90 days after the Participant’s termination of employment as an Employee; and

(iii) One year after the date of the Participant’s termination of employment or service on account of Disability or death. Upon the Participant’s Disability or death, any Incentive Share Options exercisable at the Participant’s Disability or death may be exercised by the Participant’s legal representative or representatives, by the person or persons entitled to do so pursuant to the Participant’s last will and testament, or, if the Participant fails to make testamentary disposition of such Incentive Share Option or dies intestate, by the person or persons entitled to receive the Incentive Share Option pursuant to the applicable laws of descent and distribution.

(b) Individual Dollar Limitation. The aggregate Fair Market Value (determined as of the time the Option is granted) of all Shares with respect to which Incentive Share Options are first exercisable by a Participant in any calendar year may not exceed $100,000 or such other limitation as imposed by Section 422(d) of the Code, or any successor provision. To the extent that Incentive Share Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Share Options.

(c) Exercise Price. The exercise price of an Incentive Share Option shall be equal to the Fair Market Value on the date of grant. However, the exercise price of any Incentive Share Option granted to any individual who, at the date of grant, owns Shares possessing more than ten percent of the total combined voting power of all classes of shares of the Company may not be less than 110% of Fair Market Value on the date of grant and such Option may not be exercisable for more than five years from the date of grant.

(d) Transfer Restriction. The Participant shall give the Company prompt notice of any disposition of Shares acquired by exercise of an Incentive Share Option within (i) two years from the date of grant of such Incentive Share Option or (ii) one year after the transfer of such Shares to the Participant.

(e) Expiration of Incentive Share Options. No Award of an Incentive Share Option may be made pursuant to this Plan after the tenth anniversary of the Effective Date.

(f) Right to Exercise. During a Participant’s lifetime, an Incentive Share Option may be exercised only by the Participant.

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ARTICLE 6

RESTRICTED SHARES

6.1 Grant of Restricted Shares. The Committee, at any time and from time to time, may grant Restricted Shares to Participants as the Committee, in its sole discretion, shall determine. The Committee, in its sole discretion, shall determine the number of Restricted Shares to be granted to each Participant.

6.2 Restricted Shares Award Agreement. Each Award of Restricted Shares shall be evidenced by a Restricted Shares Award Agreement that shall specify the period of restriction, the number of Restricted Shares granted, and such other terms and conditions as the Committee, in its sole discretion, shall determine. Unless the Committee determines otherwise, Restricted Shares shall be held by the Company as escrow agent until the restrictions on such Restricted Shares have lapsed.

6.3 Issuance and Restrictions. Restricted Shares shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Shares or the right to receive dividends on the Restricted Share). These restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at the time of the grant of the Award or thereafter.

6.4 Forfeiture/Repurchase. Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of employment or service during the applicable restriction period, Restricted Shares that are at that time subject to restrictions shall be forfeited or repurchased in accordance with the Restricted Shares Award Agreement; provided, however, the Committee may (a) provide in any Restricted Shares Award Agreement that restrictions or forfeiture and repurchase conditions relating to Restricted Shares will be waived in whole or in part in the event of terminations resulting from specified causes, and (b) in other cases waive in whole or in part restrictions or forfeiture and repurchase conditions relating to Restricted Shares.

6.5 Certificates for Restricted Shares. Restricted Shares granted pursuant to the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Shares are registered in the name of the Participant, certificates must bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Shares, and the Company may, at its discretion, retain physical possession of the certificate until such time as all applicable restrictions lapse.

6.6 Removal of Restrictions. Except as otherwise provided in this Article 6, Restricted Shares granted under the Plan shall be released from escrow as soon as practicable after the last day of the period of restriction. The Committee, in its discretion, may accelerate the time at which any restrictions shall lapse or be removed. After the restrictions have lapsed, the Participant shall be entitled to have any legend or legends under Section 6.5 removed from his or her Share certificate, and the Shares shall be freely transferable by the Participant, subject to applicable legal restrictions. The Committee, in its discretion, may establish procedures regarding the release of Shares from escrow and the removal of legends, as necessary or appropriate to minimize administrative burdens on the Company.

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ARTICLE 7

RESTRICTED SHARE UNITS

7.1 Grant of Restricted Share Units. The Committee, at any time and from time to time, may grant Restricted Share Units to Participants as the Committee, in its sole discretion, shall determine. The Committee, in its sole discretion, shall determine the number of Restricted Share Units to be granted to each Participant.

7.2 Restricted Share Units Agreement. Each Award of Restricted Share Units shall be evidenced by a Restricted Share Units Award Agreement that shall specify any vesting conditions, the number of Restricted Share Units granted, and such other terms and conditions as the Committee, in its sole discretion, shall determine.

7.3 Performance Objectives and Other Terms. The Committee, in its discretion, shall set performance objectives or other vesting criteria which, depending on the extent to which they are met, will determine the number or value of Restricted Share Units that will be paid out to the Participants.

7.4 Form and Timing of Payment of Restricted Share Units. At the time of grant, the Committee shall specify the date or dates on which the Restricted Share Units shall become fully vested and nonforfeitable. Upon vesting, the Committee, in its sole discretion, may pay Restricted Share Units in the form of cash, in Shares or in a combination thereof.

7.5 Forfeiture/Repurchase. Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of employment or service during the applicable restriction period, Restricted Share Units that are at that time unvested shall be forfeited or repurchased in accordance with the Restricted Share Units Award Agreement; provided, however, the Committee may (a) provide in any Restricted Share Units Award Agreement that restrictions or forfeiture and repurchase conditions relating to Restricted Share Units will be waived in whole or in part in the event of terminations resulting from specified causes, and (b) in other cases waive in whole or in part restrictions or forfeiture and repurchase conditions relating to Restricted Share Units.

ARTICLE 8

PROVISIONS APPLICABLE TO AWARDS

8.1 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements that set forth the terms, conditions and limitations for each Award which may include the term of an Award, the provisions applicable in the event the Participant’s employment or service terminates, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award.

8.2 Limits on Transfer. Except for a Permitted Transfer or as otherwise expressly approved by the Committee, no right or interest of a Participant in any Award may be pledged, encumbered, or hypothecated to or in favor of any party other than the Company or a Subsidiary, or shall be subject to any lien, obligation, or liability of such Participant to any other party. Any Permitted Transfer shall be subject to the condition that the Committee receive evidence satisfactory to it that the transfer is being made for the purposes set forth of the definition of “Permitted Transfer” in Section 2.21 hereof and on a basis consistent with the Company’s lawful issue of securities.

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8.3 Beneficiaries. Notwithstanding Section 8.2, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If the Participant is married and resides in a community property state, a designation of a person other than the Participant’s spouse as his or her beneficiary with respect to more than 50% of the Participant’s interest in the Award shall not be effective without the prior written consent of the Participant’s spouse. If no beneficiary has been designated or survives the Participant, payment shall be made to the person entitled thereto pursuant to the Participant’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is filed with the Committee.

8.4 Share Certificates. Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of the Share pursuant to the exercise of any Award, unless and until the Committee has determined, with advice of counsel, that the issuance and delivery of such certificates is in compliance with all Applicable Laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the Shares are listed or traded. All Share certificates delivered pursuant to the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with all Applicable Laws, and the rules of The New York Stock Exchange or any other national securities exchange or automated quotation system where the Shares are listed, quoted, or traded. The Committee may place legends on any Share certificate to reference restrictions applicable to the Shares. In addition to the terms and conditions provided herein, the Committee may require that a Participant make such reasonable covenants, agreements, and representations as the Committee, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements. The Committee shall have the right to require any Participant to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Committee.

8.5 Paperless Administration. Subject to Applicable Laws, the Committee may make Awards, provide applicable disclosure and procedures for exercise of Awards by an internet website or interactive voice response system for the paperless administration of Awards.

8.6 Foreign Currency. A Participant may be required to provide evidence that any currency used to pay the exercise price of any Award were acquired and taken out of the jurisdiction in which the Participant resides in accordance with Applicable Laws, including foreign exchange control laws and regulations. In the event the exercise price for an Award is paid in Chinese Renminbi or other foreign currency, as permitted by the Committee, the amount payable will be determined by conversion from U.S. dollars at the official rate promulgated by the People’s Bank of China for Chinese Renminbi, or for jurisdictions other than the People’s Republic of China, the exchange rate as selected by the Committee on the date of exercise.

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ARTICLE 9

CHANGES IN CAPITAL STRUCTURE

9.1 Adjustments. In the event of any dividend, share split, combination or exchange of Shares, amalgamation, arrangement or consolidation, spin-off, recapitalization or other distribution (other than normal cash dividends) of Company assets to its shareholders, or any other change affecting Shares or the price of a Share, the Committee shall make such proportionate adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such change with respect to (a) the aggregate number and type of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1); (b) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and (c) the grant or exercise price per share for any outstanding Awards under the Plan.

9.2 Corporate Transactions. Except as may otherwise be provided in any Award Agreement or any other written agreement entered into by and between the Company and a Participant, if the Committee anticipates the occurrence, or upon the occurrence, of a Corporate Transaction, the Committee may, in its sole discretion, provide for (i) any and all Awards outstanding hereunder to terminate at a specific time in the future and shall give each Participant the right to exercise the vested portion of such Awards during a period of time as the Committee shall determine, or (ii) the purchase of any Award for an amount of cash equal to the amount that could have been attained upon the exercise of such Award (and, for the avoidance of doubt, if as of such date the Committee determines in good faith that no amount would have been attained upon the exercise of such Award, then such Award may be terminated by the Company without payment), or (iii) the replacement of such Award with other rights or property selected by the Committee in its sole discretion or the assumption of or substitution of such Award by the successor or surviving corporation, or a Parent or Subsidiary thereof, with appropriate adjustments as to the number and kind of Shares and prices, or (iv) payment of Award in cash based on the value of Shares on the date of the Corporate Transaction plus reasonable interest on the Award through the date when such Award would otherwise be vested or have been paid in accordance with its original terms, if necessary to comply with Section 409A of the Code.

9.3 Outstanding Awards – Other Changes. In the event of any other change in the capitalization of the Company or corporate change other than those specifically referred to in this Article 9, the Committee may, in its absolute discretion, make such adjustments in the number and class of shares subject to Awards outstanding on the date on which such change occurs and in the per share grant or exercise price of each Award as the Committee may consider appropriate to prevent dilution or enlargement of rights.

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9.4 No Other Rights. Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of Shares of any class, the payment of any dividend, any increase or decrease in the number of shares of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant to action of the Committee under the Plan, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares subject to an Award or the grant or exercise price of any Award.

ARTICLE 10

ADMINISTRATION

10.1 Committee. The Plan shall be administered by the Board or a committee of one or more members of the Board (the “Committee”) to whom the Board shall delegate the authority to grant or amend Awards to Participants other than any of the Committee members. Any grant or amendment of Awards to any Committee member shall then require an affirmative vote of a majority of the Board members who are not on the Committee.

10.2 Action by the Committee. A majority of the Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

10.3 Authority of Committee. Subject to any specific designation in the Plan, the Committee has the exclusive power, authority and discretion to:

(a) Designate Participants to receive Awards;

(b) Determine the type or types of Awards to be granted to each Participant;

(c) Determine the number of Awards to be granted and the number of Shares to which an Award will relate;

(d) Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Committee in its sole discretion determines;

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(e) Determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;

(f) Prescribe the form of each Award Agreement, which need not be identical for each Participant;

(g) Decide all other matters that must be determined in connection with an Award;

(h) Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;

(i) Interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and

(j) Make all other decisions and determinations that may be required pursuant to the Plan or as the Committee deems necessary or advisable to administer the Plan.

10.4 Decisions Binding. The Committee’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties.

ARTICLE 11

EFFECTIVE AND EXPIRATION DATE

11.1 Effective Date. The Plan is effective as of the date the Plan is adopted and approved by the shareholders of the Company (the “Effective Date”). The Plan will be deemed to be approved by the shareholders if it receives the affirmative vote of the holders of a majority of the share capital of the Company present or represented and entitled to vote at a meeting duly held in accordance with the applicable provisions of the Company’s Memorandum of Association and Articles of Association.

11.2 Expiration Date. The Plan will expire on, and no Award may be granted pursuant to the Plan after, the tenth anniversary of the Effective Date. Any Awards that are outstanding on the tenth anniversary of the Effective Date shall remain in force according to the terms of the Plan and the applicable Award Agreement.

ARTICLE 12

AMENDMENT, MODIFICATION, AND TERMINATION

12.1 Amendment, Modification, And Termination. With the approval of the Board, at any time and from time to time, the Committee may terminate, amend or modify the Plan; provided, however, that (a) to the extent necessary and desirable to comply with Applicable Laws, or stock exchange rules, the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree as required, unless the Company decides to follow home country practice, and (b) unless the Company decides to follow home country practice, shareholder approval is required for any amendment to the Plan that (i) increases the number of Shares available under the Plan (other than any adjustment as provided by Article 9), (ii) permits the Committee to extend the term of the Plan or the exercise period for an Option beyond ten years from the date of grant, or (iii) results in a material increase in benefits or a change in eligibility requirements.

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12.2 Awards Previously Granted. Except with respect to amendments made pursuant to Section 12.1, no termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted pursuant to the Plan without the prior written consent of the Participant.

ARTICLE 13

GENERAL PROVISIONS

13.1 No Rights to Awards. No Participant or other person shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Committee is obligated to treat Participants and other persons uniformly.

13.2 No Shareholders Rights. No Award gives the Participant any of the rights of a shareholder of the Company unless and until Shares are in fact issued to such person in connection with such Award.

13.3 Taxes. No Shares shall be delivered under the Plan to any Participant until such Participant has made arrangements acceptable to the Committee for the satisfaction of any income and employment tax withholding obligations under Applicable Laws. The Company or any Subsidiary shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy all applicable taxes (including the Participant’s payroll tax obligations) required or permitted by law to be withheld with respect to any taxable event concerning a Participant arising as a result of this Plan. The Committee may in its discretion and in satisfaction of the foregoing requirement allow a Participant to elect to have the Company withhold Shares otherwise issuable under an Award (or allow the return of Shares) having a Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision of the Plan, the number of Shares which may be withheld with respect to the issuance, vesting, exercise or payment of any Award (or which may be repurchased from the Participant of such Award after such Shares were acquired by the Participant from the Company) in order to satisfy any income and payroll tax liabilities applicable to the Participant with respect to the issuance, vesting, exercise or payment of the Award shall, unless specifically approved by the Committee, be limited to the number of Shares which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for the applicable income and payroll tax purposes that are applicable to such supplemental taxable income.

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13.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement shall interfere with or limit in any way the right of the Service Recipient to terminate any Participant’s employment or services at any time, nor confer upon any Participant any right to continue in the employ or service of any Service Recipient.

13.5 Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a general creditor of the Company or any Subsidiary.

13.6 Indemnification. To the extent allowable pursuant to applicable law, each member of the Committee or of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Memorandum of Association and Articles of Association, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

13.7 Relationship to Other Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

13.8 Expenses. The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.

13.9 Titles and Headings. The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.

13.10 Fractional Shares. No fractional Shares shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down as appropriate.

13.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Plan, and any Award granted or awarded to any Participant who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by the Applicable Laws, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

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13.12 Government and Other Regulations. The obligation of the Company to make payment of awards in Share or otherwise shall be subject to all Applicable Laws, and to such approvals by government agencies as may be required. The Company shall be under no obligation to register any of the Shares paid pursuant to the Plan under the Securities Act or any other similar law in any applicable jurisdiction. If the Shares paid pursuant to the Plan may in certain circumstances be exempt from registration pursuant to the Securities Act or other Applicable Laws, the Company may restrict the transfer of such Shares in such manner as it deems advisable to ensure the availability of any such exemption.

13.13 Governing Law. The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the Cayman Islands.

13.14 Section 409A. To the extent that the Committee determines that any Award granted under the Plan is or may become subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable, the Plan and the Award Agreements shall be interpreted in accordance with Section 409A of the Code and the U.S. Department of Treasury regulations and other interpretative guidance issued thereunder, including without limitation any such regulation or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Committee determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Committee may adopt such amendments to the Plan and the applicable Award agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and /or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related U.S. Department of Treasury guidance.

13.15 Appendices. The Committee may approve such supplements, amendments or appendices to the Plan as it may consider necessary or appropriate for purposes of compliance with applicable laws or otherwise and such supplements, amendments or appendices shall be considered a part of the Plan; provided, however, that no such supplements shall increase the share limitation contained in Section 3.1 of the Plan without the approval of the Board.

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EX-10.3

Exhibit 10.3

FORM OF INDEMNIFICATION AGREEMENT

This Indemnification Agreement (the “Agreement”) is entered into as of                     , 2010 by and between Youku.com Inc., a company incorporated and existing under the laws of the Cayman Islands (the “Company”), and the undersigned, a director and/or officer of the Company (“Indemnitee”).

RECITALS

1. The Company recognizes that highly competent persons are becoming more reluctant to serve corporations as directors or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against risks of claims and actions against them arising out of their services to the corporation.

2. The Board of Directors of the Company (the “Board”) has determined that the inability to attract and retain highly competent persons to serve the Company is detrimental to the best interests of the Company and its shareholders and that it is reasonable and necessary for the Company to provide adequate protection to such persons against risks of claims and actions against them arising out of their services to the Company.

3. The Company is willing to indemnify Indemnitee to the fullest extent permitted by applicable law, and Indemnitee is willing to serve and continue to serve the Company on the condition that he or she be so indemnified.

AGREEMENT

In consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

A. DEFINITIONS

The following terms shall have the meanings defined below:

Expenses shall include damages, judgments, fines, penalties, settlements and costs, attorneys’ fees and disbursements and costs of attachment or similar bond, investigations, and any expenses paid or incurred in connection with investigating, defending, being a witness in, participating in (including on appeal), or preparing for any of the foregoing in, any Proceeding (as hereinafter defined).

Indemnifiable Event means any event or occurrence that takes place either before or after the execution of this Agreement, related to the fact that Indemnitee is or was a director of the Company or an officer of the Company or any of its subsidiaries, or is or was serving at the request of the Company as a director or officer of another corporation, partnership, joint venture or other entity, or related to anything done or not done by Indemnitee in any such capacity.

Participant means a person who is a party to, or witness or participant (including on appeal) in, a Proceeding.

Proceeding means any threatened, pending or completed action, suit or proceeding, or any inquiry, hearing or investigation, whether civil, criminal, administrative, investigative or other, including appeal, in which Indemnitee may be or may have been involved as a party or otherwise by reason of an Indemnifiable Event, including, without limitation, any threatened, pending or completed action, suit or proceeding by or in the right of the Company.

B. AGREEMENT TO INDEMNIFY

1. General Agreement. In the event Indemnitee was, is or becomes a Participant in, or is threatened to be made a Participant in, a Proceeding, the Company shall indemnify the Indemnitee from and against any and all Expenses which Indemnitee incurs or becomes obligated to incur in connection with such Proceeding, to the fullest extent permitted by applicable law.

2. Indemnification of Expenses of Successful Party. Notwithstanding any other provision of this Agreement to the contrary, to the extent that Indemnitee has been successful on the merits in defense of any Proceeding or in defense of any claim, issue or matter in such Proceeding, Indemnitee shall be indemnified against all Expenses incurred in connection with such Proceeding or such claim, issue or matter, as the case may be, offset by the amount of cash, if any, received by Indemnitee resulting from his/her success therein.

3. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of Expenses, but not for the total amount of Expenses, the Company shall indemnify Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

4. Exclusions. Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification under this Agreement:

(a) to the extent that payment is actually made to Indemnitee under a valid, enforceable and collectible insurance policy;

(b) to the extent that Indemnitee is indemnified and actually paid other than pursuant to this Agreement;

(c) in connection with a judicial action by or in the right of the Company, in respect of any claim, issue or matter as to which Indemnitee shall have been adjudicated by final judgment in a court of law to be liable for intentional misconduct in the performance of his/her duty to the Company unless and only to the extent that any court in which such action was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such Expenses as such court shall deem proper;

(d) in connection with any Proceeding initiated by Indemnitee against the Company, any director or officer of the Company or any other party, and not by way of defense, unless (i) the Company has joined in or the Reviewing Party (as hereinafter defined) has consented to the initiation of such Proceeding; or (ii) the Proceeding is one to enforce indemnification rights under this Agreement or any applicable law;

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(e) for a disgorgement of profits made from the purchase and sale by the Indemnitee of securities pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of any applicable U.S. state statutory law or common law;

(f) brought about by the dishonesty or fraud of Indemnitee seeking payment hereunder; provided, however, that Indemnitee shall be protected under this Agreement as to any claims upon which suit may be brought against him/her by reason of any alleged dishonesty on his/her part, unless a judgment or other final adjudication thereof adverse to Indemnitee establishes that he/she committed (i) acts of active and deliberate dishonesty, (ii) with actual dishonest purpose and intent, and (iii) which acts were material to the cause of action so adjudicated;

(g) for any judgment, fine or penalty which the Company is prohibited by applicable law from paying as indemnity;

(h) arising out of Indemnitee’s personal tax matter; or

(i) arising out of Indemnitee’s breach of an employment agreement with the Company (if any) or any other agreement with the Company or any of its subsidiaries.

5. No Employment Rights. Nothing in this Agreement is intended to create in Indemnitee any right to continued employment with the Company.

6. Contribution. If the indemnification provided in this Agreement is unavailable and may not be paid to Indemnitee for any reason other than those set forth in Section B.4 above, then the Company shall contribute to the amount of Expenses paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in such proportion as is appropriate to reflect (i) the relative benefits received by the Company on the one hand and by Indemnitee on the other hand from the transaction from which such Proceeding arose, and (ii) the relative fault of the Company on the one hand and of Indemnitee on the other hand in connection with the events which resulted in such Expenses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of Indemnitee on the other hand shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such Expenses. The Company agrees that it would not be just and equitable if contribution pursuant to this Section B.6 were determined by pro rata allocation or any other method of allocation which does not take account of the foregoing equitable considerations.

C. INDEMNIFICATION PROCESS

1. Notice and Cooperation By Indemnitee. Indemnitee shall, as a condition precedent to his/her right to be indemnified under this Agreement, give the Company notice in writing as soon as practicable of any claim made against Indemnitee for which indemnification will or could be sought under this Agreement. Notice to the Company shall be given in accordance with Section F.7 below. In addition, Indemnitee shall give the Company such information and cooperation as the Company may reasonably request.

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2. Indemnification Payment.

(a) Advancement of Expenses. Indemnitee may submit a written request with reasonable particulars to the Company requesting that the Company advance to Indemnitee all Expenses that may be reasonably incurred by Indemnitee in connection with a Proceeding. Upon the determination by the Indemnitee that additional Expenses may be reasonably incurred by the Indemnitee in connection with a Proceeding, the Indemnitee may submit additional written requests with reasonable particulars to the Company requesting that the Company advance to the Indemnitee such additional Expenses. The Company shall, within ten (10) business days of receiving any such written request by Indemnitee, advance all requested Expenses to Indemnitee. Any excess of the advanced Expenses over the actual Expenses will be repaid to the Company.

(b) Reimbursement of Expenses. To the extent Indemnitee has not requested any advanced payment of Expenses from the Company, Indemnitee shall be entitled to receive reimbursement for the Expenses incurred in connection with a Proceeding from the Company as soon as practicable after Indemnitee makes a written request to the Company for reimbursement.

(c) Determination by the Reviewing Party. Notwithstanding anything foregoing to the contrary, in the event the Reviewing Party (as hereinafter defined) informs the Company that Indemnitee is not entitled to indemnification in connection with a Proceeding under this Agreement or applicable law, the Company shall be entitled to be reimbursed by Indemnitee for all the Expenses previously advanced or otherwise paid to Indemnitee in connection with such Proceeding; provided, however, that Indemnitee may bring a suit to enforce his indemnification right in accordance with Section C.3 below.

3. Suit to Enforce Rights. Regardless of any action by the Reviewing Party, if Indemnitee has not received full indemnification within 30 days after making a written demand in accordance with Section C.2 above, Indemnitee shall have the right to enforce his/her indemnification rights under this Agreement by commencing litigation in any court of competent jurisdiction seeking a determination by the court or challenging any determination by the Reviewing Party or any breach in any aspect of this Agreement. Any determination by the Reviewing Party not challenged by Indemnitee and any final judgment entered by the court shall be binding on the Company and Indemnitee.

4. Assumption of Defense. In the event the Company is obligated under this Agreement to advance or bear any Expenses for any Proceeding against Indemnitee, the Company shall be entitled to assume the defense of such Proceeding, with counsel approved by Indemnitee, upon delivery to Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, unless (i) the employment of counsel by Indemnitee has been previously authorized by the Company, (ii) Indemnitee shall have reasonably concluded, based on written advice of counsel, that there may be a conflict of interest of such counsel retained by the Company between the Company and Indemnitee in the conduct of any such defense, or (iii) the Company ceases or terminates the employment of such counsel with respect to the defense of such Proceeding, in any of which events the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company. At all times, Indemnitee shall have the right to employ counsel in any Proceeding at Indemnitee’s expense.

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5. Defense to Indemnification, Burden of Proof and Presumptions. It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement that it is not permissible under this Agreement or applicable law for the Company to indemnify the Indemnitee for the amount claimed. In connection with any such action or any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified under this Agreement, the burden of proving such a defense or determination shall be on the Company. Neither the failure of the Reviewing Party or the Company to have made a determination prior to the commencement of such action by Indemnitee that indemnification is proper under the circumstances because Indemnitee has met the standard of conduct set forth in applicable law, nor an actual determination by the Reviewing Party or the Company that Indemnitee had not met such applicable standard of conduct shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

6. No Settlement Without Consent. Neither party to this Agreement shall settle any Proceeding in any manner that would impose any damage, loss, penalty or limitation on Indemnitee without the other party’s written consent. Neither the Company nor Indemnitee shall unreasonably withhold its consent to any proposed settlement.

7. Company Participation. Subject to Section B.6, the Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial action if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense, conduct and/or settlement of such action.

8. Reviewing Party.

(a) For purposes of this Agreement, the “Reviewing Party” with respect to each indemnification request of Indemnitee shall be (A) the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors (as hereinafter defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, said Disinterested Directors so direct, Independent Counsel (as hereinafter defined) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; and, if it is determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel or member of the Board of Directors shall act reasonably and in good faith in making a determination under this Agreement of the Indemnitee’s entitlement to indemnification. Any reasonable costs or expenses (including reasonable attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom to the extent as aforesaid. “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

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(b) If the determination of entitlement to indemnification is to be made by Independent Counsel, the Independent Counsel shall be selected as provided in this Section C.8(b). The Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors, in which event the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors shall select), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within 10 days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section C.8(d) of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If the determination of entitlement to indemnification is to be made by Independent Counsel, but within 20 days after submission by Indemnitee of a written request for indemnification, no Independent Counsel shall have been selected and not objected to, then the Board of Directors by a majority vote shall select the Independent Counsel. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting under this Agreement, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section C.8(b), regardless of the manner in which such Independent Counsel was selected or appointed.

(c) In making a determination with respect to entitlement to indemnification hereunder, the Reviewing Party shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement (with or without court approval), conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Company and any other corporation, partnership, joint venture or other entity of which Indemnitee is or was serving at the written request of the Company as a director, officer, employee, agent or fiduciary, including financial statements, or on information supplied to Indemnitee by the officers and directors of the Company or such other corporation, partnership, joint venture or other entity in the course of their duties, or on the advice of legal counsel for the Company or such other corporation, partnership, joint venture or other entity or on information or records given or reports made to the Company or such other corporation, partnership, joint venture or other entity by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or such other corporation, partnership, joint venture or other entity. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Company or such other corporation, partnership, joint venture or other entity shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. The provisions of this Section C.8(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

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(d) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above.

D. DIRECTOR AND OFFICER LIABILITY INSURANCE

1. Required Obligation. The Company shall at all times maintain a policy or policies of insurance with reputable insurance companies providing the officers and directors of the Company with coverage for losses incurred in connection with their services to the Company or to ensure the Company’s performance of its indemnification obligations under this Agreement.

2. Coverage of Indemnitee. To the extent the Company maintains an insurance policy or policies providing directors’ and officers’ liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any of the Company’s directors or officers.

3. Obligation Exception. Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain any director and officer insurance policy if the Board determines in good faith during the tenure of such director or officer that such insurance is not reasonably available in the case that (i) premium costs for such insurance are disproportionate to the amount of coverage provided, (ii) the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit, or (iii) Indemnitee is covered by similar insurance maintained by a parent or subsidiary of the Company. Upon such a determination, the Board shall immediately notify the officer or director.

E. NON-EXCLUSIVITY; FEDERAL PREEMPTION; TERM

1. Non-Exclusivity. The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the Articles of Association, applicable law or any written agreement between Indemnitee and the Company (including its subsidiaries). The indemnification provided under this Agreement shall continue to be available to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though he/she may have ceased to serve in any such capacity at the time of any Proceeding.

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2. Federal Preemption. Notwithstanding the foregoing, both the Company and Indemnitee acknowledge that in certain instances, U.S. federal law or public policy may override applicable law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. Indemnitee acknowledges that the U.S. Securities and Exchange Commission (the “SEC”) believes that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee.

3. Duration of Agreement. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer and/or a director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding by reason of his former or current capacity at the Company or any other enterprise at the Company’s request, whether or not he/she is acting or serving in any such capacity at the time any Expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as an officer and/or a director of the Company or any other enterprise at the Company’s request.

F. MISCELLANEOUS

1. Amendment of this Agreement. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall operate as a waiver of any other provisions (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided in this Agreement, no failure to exercise or any delay in exercising any right or remedy shall constitute a waiver.

2. Subrogation. In the event of payment to Indemnitee by the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents as necessary to enable the Company to bring suit to enforce such rights.

3. Assignment; Binding Effect. Neither this Agreement nor any of the rights or obligations hereunder may be assigned by either party hereto without the prior written consent of the other party; except that the Company may, without such consent, assign all such rights and obligations to a successor in interest to the Company which assumes all obligations of the Company under this Agreement. Notwithstanding the foregoing, this Agreement shall be binding upon and inure to the benefit of and be enforceable by and against the parties hereto and the Company’s successors (including any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the business and/or assets of the Company) and assigns, as well as Indemnitee’s spouses, heirs, and personal and legal representatives.

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4. Severability and Construction. Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law. The Company’s inability, pursuant to a court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement. In addition, if any portion of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by applicable law. The parties hereto acknowledge that they each have opportunities to have their respective counsel review this Agreement. Accordingly, this Agreement shall be deemed to be the product of both of the parties hereto, and no ambiguity shall be construed in favor of or against either of the parties hereto.

5. Counterparts. This Agreement may be executed in two counterparts, both of which taken together shall constitute one instrument.

6. Governing Law. This agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto hereunder shall be governed, construed and interpreted in accordance with the laws of the State of New York, U.S.A., without giving effect to conflicts of law provisions thereof.

7. Notices. All notices, demands, and other communications required or permitted under this Agreement shall be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed, postage prepaid, certified or registered mail, return receipt requested, and addressed to the Company at:

Youku.com Inc.

5/F, SinoSteel Plaza

8 Haidian Street, Haidian District

Beijing, 100080

The People’s Republic of China

Attn: Chief Financial Officer

and to Indemnitee at:

the address set forth on Annex A hereto.

8. Entire Agreement. This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.

(Signature page follows)

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IN WITNESS WHEREOF, the parties hereto execute this Agreement as of the date first written above.

COMPANY

YOUKU.COM INC.

By:

Name:

Title:

INDEMNITEE

Name:

Annex A

Name and Business Address

Attn:

Tel:

Fax:

Email:

EX-10.4

Exhibit 10.4

FORM OF EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of                      by and between Youku.com Inc., a company incorporated and existing under the laws of the Cayman Islands (the “Company”) and                     , an individual (the “Executive”). The term “Company” as used herein with respect to all obligations of the Executive hereunder shall be deemed to include the Company and all of its direct or indirect parent companies, subsidiaries, affiliates, or subsidiaries or affiliates of its parent companies (collectively, the “Group”).

RECITALS

A. The Company desires to employ the Executive and to assure itself of the services of the Executive during the term of Employment (as defined below).

B. The Executive desires to be employed by the Company during the term of Employment and under the terms and conditions of this Agreement.

AGREEMENT

The parties hereto agree as follows:

1. POSITION

The Executive hereby accepts a position of                      (the “Employment”) of the Company.

2. TERM

Subject to the terms and conditions of this Agreement, the initial term of the Employment shall be [four] years, commencing on                     , 200     (the “Effective Date”), until                     , 200    , unless terminated earlier pursuant to the terms of this Agreement. Upon expiration of the initial [four-year] term, the Employment shall be automatically extended for successive [one-year] terms unless either party gives the other party hereto a prior written notice to terminate the Employment prior to the expiration of such one-year term or unless terminated earlier pursuant to the terms of this Agreement.

3. PROBATION

[There is no probation period for this Employment.]

4. DUTIES AND RESPONSIBILITIES

The Executive’s duties at the Company will include all jobs assigned by the Board of Directors of the Company (the “Board”) and the Company’s Chief Executive Officer. The Executive hereby agrees and acknowledges that one of his/her initial primary responsibilities is to                                         .

The Executive shall devote all of his/her working time, attention and skills to the performance of his/her duties at the Company and shall faithfully and diligently serve the Company in accordance with this Agreement and the guidelines, policies and procedures of the Company approved from time to time by the Board.

The Executive shall use his/her best efforts to perform his/her duties hereunder. The Executive shall not, without the prior written consent of the Board, become an employee or consultant of any entity other than the Company and/or any member of the Group, and shall not carry on or be interested in the business or entity that competes with that carried on by the Group (any such business or entity, a “Competitor”), provided that nothing in this clause shall preclude the Executive from holding any shares or other securities of any Competitor that is listed on any securities exchange or recognized securities market anywhere. The Executive shall notify the Company in writing of his/her interest in such shares or securities in a timely manner and with such details and particulars as the Company may reasonably require.

5. NO BREACH OF CONTRACT

The Executive hereby represents to the Company that: (i) the execution and delivery of this Agreement by the Executive and the performance by the Executive of the Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or otherwise bound, except for agreements that are required to be entered into by and between the Executive and any member of the Group pursuant to applicable law of the jurisdiction where the Executive is based, if any; (ii) that the Executive has no information (including, without limitation, confidential information and trade secrets) relating to any other person or entity which would prevent, or be violated by, the Executive entering into this Agreement or carrying out his/her duties hereunder; and (iii) that the Executive is not bound by any confidentiality, trade secret or similar agreement (other than this) with any other person or entity except for other member(s) of the Group, as the case may be.

6. LOCATION

The Executive will be based in                      until both parties hereto agree to change otherwise.

7. COMPENSATION AND BENEFITS

(a) Cash Compensation. The Executive’s cash compensation shall be provided by the Company pursuant to Schedule A hereto, subject to annual review and adjustment by the Board.

(b) Equity Incentives. The Executive will be entitled to receive [options under the Company’s 2006 Stock Option Scheme, as amended (the “Scheme”)][restricted shares under the 2010 Share Incentive Plan (the “Plan”)] pursuant to the following principal terms, subject to terms and conditions of the [Scheme][Plan] and the applicable award agreement:

[(1) The Executive shall receive an option to purchase [    ] ordinary shares of the Company (the “Option”);

(2) The exercise price of the Option shall be at US$[    ] per share; and

(3) The Option shall vest at the following schedule: (i) one-sixth of the Option shall be vested upon the first anniversary of the grant date; (ii) one-twelfth of the Option shall be vested upon the last day of each three-month period of the second and third year after the grant date; and (iii) one-twenty fourth of the option shall be vested upon the last day of each three-month period of the fourth year after the grant date.]

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[(1) The Executive shall receive [    ] restricted shares (the “Awards”); and

(2) The Award shall vest at the following schedule: [    ]]

(c) Benefits. The Executive is eligible for participation in any standard employee benefit plan of the Company, including any health insurance plan and annual holiday plan.

8. TERMINATION OF THE AGREEMENT

(a) By the Company. The Company may terminate the Employment for cause, at any time, without advance notice or remuneration, if (1) the Executive is convicted or pleads guilty to a felony or to an act of fraud, misappropriation or embezzlement, (2) the Executive has been negligent or acted dishonestly to the detriment of the Company, (3) the Executive has engaged in actions amounting to misconduct or failed to perform his/her duties hereunder and such failure continues after the Executive is afforded a reasonable opportunity to cure such failure, (4) the Executive has died, or (5) the Executive has a disability which shall mean a physical or mental impairment which, as reasonably determined by the Board, renders the Executive unable to perform the essential functions of his/her employment with the Company, even with reasonable accommodation that does not impose an undue hardship on the Company, for more than 180 days in any 12-month period, unless a longer period is required by applicable law, in which case that longer period would apply. In addition, the Company may terminate the Employment without cause, at any time, upon one-month prior written notice to the Executive. Upon termination without cause, the Company shall provide the Executive with severance benefits, including (i) compensation equivalent to [six months] of the Executive’s cash compensation that he/she is entitled to immediately prior to such termination, (ii) health care coverage for [six months] following date of termination to the same extent that the Executive would have been entitled to had his/her employment continued during such [six-month] period, and (iii) [payment of an annual bonus in an amount equivalent to the annual bonus the Executive received for the year prior to the year in which the termination occurs]. Notwithstanding the forgoing, if the applicable law of the jurisdiction where the Executive is based requires more compensation to the Executive, such laws and regulations shall be followed.

(b) By the Executive. The Executive may terminate the Employment at any time with a one-month prior written notice to the Company, if (1) there is any significant change in the Executive’s authorities and responsibilities inconsistent in any material and adverse respect with his/her title and position, or (2) there is a material reduction in the Executive’s annual salary before the next annual salary review. Under such circumstances, the Executive is entitled to the same severance benefits as in the situation of termination by the Company without cause as set forth in Section 8(a) above. In addition, the Executive may resign prior to the expiration of this Agreement upon six-month prior written notice.

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(c) Notice of Termination. Any termination of the Executive’s employment under this Agreement shall be communicated by written notice of termination from the terminating party to the other party. The notice of termination shall indicate the specific provision(s) of this Agreement relied upon in effecting the termination.

9. CONFIDENTIALITY AND NONDISCLOSURE

(a) Confidentiality and Non-disclosure. In the course of the Executive’s services, the Executive may have access to the Company and/or the Company’s client’s and/or prospective client’s trade secrets and confidential information, including but not limited to those embodied in memoranda, manuals, letters or other documents, computer disks, tapes or other information storage devices, hardware, or other media or vehicles, pertaining to the Company and/or the Company’s client’s and/or prospective client’s business. All such trade secrets and confidential information are considered confidential. All materials containing any such trade secret and confidential information are the property of the Company and/or the Company’s client and/or prospective client, and shall be returned to the Company and/or the Company’s client and/or prospective client upon expiration or earlier termination of this Agreement. The Executive shall not directly or indirectly disclose or use any such trade secret or confidential information, except as required in the performance of the Executive’s duties in connection with the Employment, or pursuant to applicable law.

(b) Trade Secrets. During and after the Employment, the Executive shall hold the Trade Secrets in strict confidence; the Executive shall not disclose these Trade Secrets to anyone except other employees of the Company who have a need to know the Trade Secrets in connection with the Company’s business. The Executive shall not use the Trade Secrets other than for the benefits of the Company.

“Trade Secrets” means information deemed confidential by the Company, treated by the Company or which the Executive knows or ought reasonably to have known to be confidential, and trade secrets, including without limitation designs, processes, pricing policies, methods, inventions, conceptions, technology, technical data, financial information, corporate structure and know-how, relating to the business and affairs of the Company and its subsidiaries, affiliates and business associates, whether embodied in memoranda, manuals, letters or other documents, computer disks, tapes or other information storage devices, hardware, or other media or vehicles. Trade Secrets do not include information generally known or released to public domain through no fault of the Executive.

(c) Former Employer Information. The Executive agrees that he/she has not and will not, during the term of his/her employment improperly use or disclose any proprietary information or trade secrets of any former employer or other person or entity with which the Executive has an agreement to keep in confidence information acquired by Executive, if any. The Executive will indemnify the Company and hold it harmless from and against all claims, liabilities, damages and expenses, including reasonable attorneys’ fees and costs of suit, arising out of or in connection with any violation of the foregoing.

(d) Third Party Information. The Executive recognizes that the Company may have received, and in the future may receive, from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. The Executive agrees that the Executive owes the Company and such third parties, during the Executive’s employment by the Company and thereafter, a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person or firm and to use it in a manner consistent with, and for the limited purposes permitted by, the Company’s agreement with such third party.

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This Section 9 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 9, the Company shall have right to seek remedies permissible under applicable law.

10. INVENTIONS

(a) Inventions Retained and Licensed. The Executive has attached hereto, as Schedule B, a list describing all inventions, ideas, improvements, designs and discoveries, whether or not patentable and whether or not reduced to practice, original works of authorship and trade secrets made or conceived by or belonging to the Executive (whether made solely by the Executive or jointly with others) that (i) were developed by Executive prior to the Executive’s employment by the Company (collectively, “Prior Inventions”), (ii) relate to the Company’ actual or proposed business, products or research and development, and (iii) are not assigned to the Company hereunder; or, if no such list is attached, the Executive represents that there are no such Prior Inventions. Except to the extent set forth in Schedule B, the Executive hereby acknowledges that, if in the course of his/her service for the Company, the Executive incorporates into a Company product, process or machine a Prior Invention owned by the Executive or in which he has an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide right and license (which may be freely transferred by the Company to any other person or entity) to make, have made, modify, use, sell, sublicense and otherwise distribute such Prior Invention as part of or in connection with such product, process or machine.

(b) Disclosure and Assignment of Inventions. The Executive understands that the Company engages in research and development and other activities in connection with its business and that, as an essential part of the Employment, the Executive is expected to make new contributions to and create inventions of value for the Company.

From and after the Effective Date, the Executive shall disclose in confidence to the Company all inventions, improvements, designs, original works of authorship, formulas, processes, compositions of matter, computer software programs, databases, mask works and trade secrets (collectively, the “Inventions”), which the Executive may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of the Executive’s Employment at the Company. The Executive acknowledges that copyrightable works prepared by the Executive within the scope of and during the period of the Executive’s Employment with the Company are “works for hire” and that the Company will be considered the author thereof. The Executive agrees that all the Inventions shall be the sole and exclusive property of the Company and the Executive hereby assign all his/her right, title and interest in and to any and all of the Inventions to the Company or its successor in interest without further consideration.

(c) Patent and Copyright Registration. The Executive agrees to assist the Company in every proper way to obtain for the Company and enforce patents, copyrights, mask work rights, trade secret rights, and other legal protection for the Inventions. The Executive will execute any documents that the Company may reasonably request for use in obtaining or enforcing such patents, copyrights, mask work rights, trade secrets and other legal protections. The Executive’s obligations under this paragraph will continue beyond the termination of the Employment with the Company, provided that the Company will reasonably compensate the Executive after such termination for time or expenses actually spent by the Executive at the Company’s request on such assistance. The Executive appoints the Secretary of the Company as the Executive’s attorney-in-fact to execute documents on the Executive’s behalf for this purpose.

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(d) Return of Confidential Materials. In the event of the Executive’s termination of employment with the Company for any reason whatsoever, Executive agrees promptly to surrender and deliver to the Company all records, materials, equipment, drawings, documents and data of any nature pertaining to any confidential information or to his/her employment, and Executive will not retain or take with him/her any tangible materials or electronically stored data, containing or pertaining to any confidential information that Executive may produce, acquire or obtain access to during the course of his/her employment.

This Section 10 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 10, the Company shall have right to seek remedies permissible under applicable law.

11. NON-COMPETITION AND NON-SOLICITATION

In consideration of the base salary provided to the Executive by the Company hereunder, the adequacy of which is hereby acknowledged by the parties hereto, the Executive agrees that during the term of the Employment and for a period of one year following the termination of the Employment for whatever reason:

(a) The Executive will not approach clients, customers or contacts of the Company or other persons or entities introduced to the Executive in the Executive’s capacity as a representative of the Company for the purposes of doing business with such persons or entities which will harm the business relationship between the Company and such persons and/or entities;

(b) unless expressly consented to by the Company, the Executive will not assume employment with or provide services for any Competitor, or engage, whether as principal, partner, licensor or otherwise, any Competitor; and

(c) unless expressly consented to by the Company, the Executive will not seek directly or indirectly, by the offer of alternative employment or other inducement whatsoever, to solicit the services of any employee of the Company employed as at or after the date of such termination, or in the year preceding such termination.

The provisions contained in this Section 11 are considered reasonable by the Executive and the Company. In the event that any such provisions should be found to be void under applicable laws but would be valid if some part thereof was deleted or the period or area of application reduced, such provisions shall apply with such modification as may be necessary to make them valid and effective.

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This Section 11 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 11, the Executive acknowledges that there will be no adequate remedy at law, and the Company shall be entitled to injunctive relief and/or a decree for specific performance, and such other relief as may be proper (including monetary damages if appropriate). In any event, the Company shall have right to seek all remedies permissible under applicable law.

12. ASSIGNMENT

This Agreement is personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder; provided, however, that (i) the Company may assign or transfer this Agreement or any rights or obligations hereunder to any member of the Group without such consent, and (ii) in the event of a change-of-control transaction of the Company, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder.

13. SEVERABILITY

If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of this Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.

14. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement and understanding between the Executive and the Company regarding the terms of the Employment and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter. The Executive acknowledges that he/she has not entered into this Agreement in reliance upon any representation, warranty or undertaking which is not set forth in this Agreement.

15. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the law of the State of New York, U.S.A.

16. AMENDMENT

This Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto.

17. WAIVER

Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

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18. NOTICES

All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made if (i) delivered by hand, (ii) otherwise delivered against receipt therefor, or (iii) sent by a recognized courier with next-day or second-day delivery to the last known address of the other party.

19. COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.

20. NO INTERPRETATION AGAINST DRAFTER

Each party recognizes that this Agreement is a legally binding contract and acknowledges that such party has had the opportunity to consult with legal counsel of choice. In any construction of the terms of this Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such terms.

[Remainder of this page has been intentionally left blank.]

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IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.

Youku.com Inc.

By:

Name:

Title:

Executive

Signature:

Name:

Schedule A

Cash Compensation

	Amount	Pay Period
Base Salary
Cash Bonus

10

Schedule B

List of Prior Inventions

Title Date Identifying Number or Brief Description

         No inventions or improvements

         Additional Sheets Attached

Signature of Executive:                     

Print Name of Executive:                     

Date:                     

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EX-10.5

Exhibit 10.5

AMENDED AND RESTATED

BUSINESS OPERATIONS AGREEMENT

This Amended and Restated Business Operations Agreement (this “Agreement”) is entered in Beijing, the People's Republic of China (the “PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for the purposes of this Agreement) and dated August 16, 2010

by and among the following parties:

(1) PARTY A: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

Legal Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: Victor Wing Cheung Koo

(2) PARTY B: 1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.

Legal Address: Section A&C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: QIN Qiong

(3) PARTY C: QIN QIONG

(4) PARTY D: LIU DELE

(Individually a “Party”, and collectively the “Parties”)

WHEREAS:

A. Party A is a wholly foreign-owned enterprise registered in the PRC;

B. Party B is a wholly domestic-owned company registered in the PRC and is approved by relevant governmental authorities to engage in the business of providing Internet information services and value-added telecommunications services;

C. A business relationship has been established between Party A and Party B by entering into Exclusive Technical and Consulting Services Agreement, pursuant to which Party B is required to make all the stipulated payments to Party A. Therefore, the daily operations of Party B will have a material impact on its ability to pay the payables to Party A;

D. Party C and Party D are the shareholders of Party B, who own 80% and 20% equity interest, respectively, in Party B.

E. The Parties concluded two business operations agreements in March, 2006 and November, 2007 (the “Previous Agreements”), which were in form and substance similar to this Agreement. The Parties have strictly performed and complied with all stipulations under the Previous Agreements. The Parties believe that it is in the best interest of the Parties to amend and restate the Previous Agreements.

Amended and Restated Business Operations Agreement -1-

THEREFORE, through friendly negotiation in the principle of equality and common interest, the Parties hereby jointly agree to abide by the following:

1. Effective Date

This Agreement shall be effective upon its being signed by the Parties hereunder (“Effective Date”).

2. Negative Undertakings

In order to ensure Party B's performance of the agreements between Party A and Party B and all its obligations born to Party A, Party B together with its shareholders Party C and Party D hereby jointly confirm and agree that unless Party B has obtained a prior written consent from Party A or another party appointed by Party A, Party B shall not conduct any transaction which may materially affect its assets, obligations, rights or operations, including but not limited to the following contents:

2.1 To conduct any business that is beyond the normal business scope;

2.2 To borrow money or incur any debt from any third party;

2.3 To change or dismiss any directors or to dismiss and replace any senior management members;

2.4 To sell to or acquire from any third party any assets or rights, including but not limited to any intellectual property rights;

2.5 To provide guarantee for any third party with its assets or intellectual property rights or to provide any other guarantee or to place any other obligations over its assets;

2.6 To amend the articles of association of the Party B or to change its business area;

2.7 To change the normal business process or modify any material company policy;

2.8 To assign any of the rights or obligations under this Agreement herein to any third party;

2.9 To incur or assume any indebtedness.

Amended and Restated Business Operations Agreement -2-

3. Management of Operation and Arrangements of Human Resource

3.1 Party B together with its shareholders Party C and Party D hereby jointly agree to accept and strictly perform the proposals in respect of the employment and dismissal of its employees, the daily business management and financial management, etc., provided by Party A from time to time.

3.2 Party B together with its shareholders Party C and Party D hereby jointly and severally agree that Party C and Party D shall only appoint the personnel designated by Party A as the Executive Director or Directors of the Board of Directors of Party B in accordance with the procedures required by the applicable laws and regulations and the articles of association of Party B, and shall cause such Executive Director or Board of Directors of Party B to appoint the personnel designated by Party A as Party B’s General Manager, Chief Financial Officer, and other senior officers.

3.3 If any of the above officers resigns or is dismissed by Party A, he or she will lose the qualification to be appointed for any position in Party B and thereafter Party B, Party C and Party D shall appoint or cause the appointment of another candidate designated by Party A to assume such position.

3.4 For the purpose of the above-mentioned Section 3.3, Party B, Party C and Party D shall take all the necessary internal or external procedures to accomplish the above dismissal and engagement in accordance with the relevant laws and regulations, the articles of association of Party B and this Agreement.

3.5 Each of Party C and Party D hereby agrees to, upon the execution of this Agreement, simultaneously sign a Power of Attorney, pursuant to which each of Party C and Party D shall authorize the persons designated by Party A to exercise his or her shareholders' rights, including the full voting right of a shareholder at Party B's shareholders' meetings. Each of Party C and Party D further agrees to replace the authorized person appointed according to the above mentioned Power of Attorneys at any time according to the requirement of Party A.

Party A hereby designates and authorizes Mr. Victor Wing Cheung Koo to serve as the person designated by Party A as noted in the preceding paragraph, until such time as Party A dismisses Mr. Victor Wing Cheung Koo as its authorized representative and replaces and authorizes another person to serve as his substitute. Each of Party C and Party D hereby confirms and acknowledges this designation and authorization.

Amended and Restated Business Operations Agreement -3-

4. Other Agreements

4.1 Given (i) that the business relationship between Party A and Party B has been established through the Exclusive Technical and Consulting Services Agreement, the Trademark License Agreement and the Domain Name License Agreement and (ii) that the daily business activities of Party B will have a material impact on Party B’s ability to pay the payables to Party A, each of Party C and Party D agrees that:

• he/she shall not put forward, or vote in favor of, any shareholder resolution to, or otherwise request Party B to, distribute profits, funds, assets or property to the shareholders of Party B or any of its affiliates; and

• he/she shall not put forward, or vote in favor of, any shareholder resolution to, or otherwise request Party B to, issue any dividends or other distributions with respect to the equity interest of Party B held by Party C or Party D; provided, however, if such dividends or other distributions are distributed to Party C and/or Party D from Party B, he/she will immediately and unconditionally pay or transfer to Party A any dividends or other distributions in whatsoever form obtained from Party B as a shareholder of Party B at the time such payables arise, after having deducted and paid any and all relevant taxes and expenses applicable to such a shareholder as a result of his/her receipt of such dividends or other distributions.

4.2 If any of Party C or Party D is held liable for any legal or any other responsibilities by reason of his/her performance of his/her obligations under this Agreement and as a shareholder of Party B, Party A shall keep each of Party C and Party D fully indemnified from any such liabilities, costs or losses (including but not limited to any and all legal expenses) incurred by Party C and/or Party D, provided that the actions perform by Part C and/or Party D according to his/her obligations under this Agreement and as a shareholder of Party B are taken in good faith and are not contrary to the best interests of Party A and Party B.

4.3 To ensure that the cash flow requirements of Party B’s ordinary operations are met and/or to set off any loss accrued during such operations, Party A is obligated, only to the extent permissible under PRC law, to provide financing support for Party B, whether or not Party B actually incurs any such operational loss. Party A’s financing support for Party B may take the form of bank entrusted loans or borrowings. Contracts for any such entrusted loans or borrowings shall be executed separately.

Amended and Restated Business Operations Agreement -4-

5. Entire Agreement and Modifications

5.1 This Agreement together with all the other agreements and/or documents mentioned or specifically included in this Agreement, to which Party A, Party B, Party C and/or Party D is a party thereunder (where applicable) will be part of the whole agreements concluded in respect of the subject matters in this Agreement and shall replace all the other prior oral and written agreements, contracts, understandings and communications among all the parties involving the subject matters of this Agreement.

5.2 Any modification of this Agreement shall take effect only after it is executed by each and every Party. The amendment and supplement duly executed by each and every Party shall form part of this Agreement and shall have the same legal effect as this Agreement.

6. Governing Law

The execution, validity, performance, interpretation and disputes of this Agreement shall be governed by and construed in accordance with the PRC laws.

7. Dispute Resolution

7.1 The Parties shall strive to settle any dispute arising from the interpretation or performance of this Agreement through friendly consultation in good faith. In case no settlement can be reached through friendly consultation, each Party can submit such matter to the China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration in accordance with the then current rules of CIETAC. The arbitration proceedings shall take place in Beijing and shall be conducted in Chinese. The arbitration award shall be final and binding upon all the Parties. This article shall not be affected by the termination or elimination of this Agreement.

7.2 During the process of the dispute resolution, each Party shall continue to perform its obligations in good faith according to the provisions of this Agreement except for the subject matters in dispute.

8. Notice

8.1 Any notice that is given by the Parties hereto for the purpose of performing the rights and obligations hereunder shall be in written form. Where such notice is delivered personally, the actual delivery time is regarded as notice time; where such notice is transmitted by telex or facsimile, the notice time is the time when such notice is transmitted. If such notice (i) does not reach the addressee on a business day or (ii) reaches the addressee after the business hours, the next business day following such day is the date of notice. The written form includes facsimile and telex.

Amended and Restated Business Operations Agreement -5-

8.2 Any notice or other correspondence hereunder provided shall be delivered to the following addresses in accordance with the above terms:

PARTY A	:	1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.
Address	:	Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	Victor Wing Cheung Koo
PARTY B	:	1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.
Address	:	Section A&C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	QIN Qiong
PARTY C	:	QIN Qiong
Address	:	Room 1602, Tower 3, Palm Tree International Apartment, 8 South Chaoyang Park Road, Beijing100026, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	QIN Qiong
PARTY D	:	LIU Dele
Address	:	Room 1701, Tower D, Sunz Garden, 98 Jianguo Road, Chaoyang District, Beijing 100022., China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	LIU Dele

9. Effectiveness, Term and Others

9.1 This Agreement shall be executed by a duly authorized representative of each Party on the date first written above and become effective as of the Effective Date. The term of this agreement is ten years unless early termination occurs in accordance with the relevant provisions herein. This Agreement will extend automatically for another ten year period except that Party A provides a written notice stating its intention not to extend this Agreement three months prior to the expiration of the initial term of this Agreement.

Amended and Restated Business Operations Agreement -6-

9.2 Party B, Party C and Party D shall not terminate this Agreement within the terms of this Agreement. Notwithstanding the above stipulation, Party A shall have the right to terminate this Agreement at any time by issuing a prior written notice to Party B, Party C and Party D thirty (30) days before the termination.

9.3 In case any terms and stipulations in this Agreement are regarded as illegal or can not be performed in accordance with the applicable laws, they shall be deemed to be deleted from this Agreement and lose their effect and this Agreement shall be treated as if they did not exist from the very beginning. However, the remaining stipulations will remain effective. Each Party shall replace the deleted stipulations with lawful and effective stipulations, which are acceptable to each Party, through mutual negotiation.

9.4 Any failure or delay on the part of any Party to exercise any rights, powers or privileges hereunder shall not operate as a waiver thereof. Any single or partial exercise of such rights, powers or privileges shall not preclude any further exercise of such rights, powers or privileges.

9.5 This Agreement amends and restates all Previous Agreements. In the event of any discrepancy between this Agreement and any Previous Agreement, this Agreement shall prevail to the extent of the discrepant provisions.

[The space below is intentionally left blank.]

Amended and Restated Business Operations Agreement -7-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

PARTY A: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo

PARTY B: 1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Qin Qiong
Authorized Representative: QIN Qiong

PARTY C: QIN QIONG

By: /s/ Qin Qiong

PARTY D: LIU DELE

By: /s/ Liu Dele

Amended and Restated Business Operations Agreement -8-

EX-10.6

Exhibit 10.6

AMENDED AND RESTATED

BUSINESS OPERATIONS AGREEMENT

This Amended and Restated Business Operations Agreement (this “Agreement”) is entered in Beijing, the People's Republic of China (the “PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for the purposes of this Agreement) and dated August 16, 2010 by and among the following parties:

(1) PARTY A: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

Legal Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: Victor Wing Cheung Koo

(2) PARTY B: JIAHEYI ADVERTISING (BEIJING) CO., LTD.

Legal Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: QIN Qiong

(3) PARTY C: QIN QIONG, a PRC citizen whose PRC identification number is 10108197109214485, and whose residential address is Room 1602, Tower 3, Palm Tree International Apartment, 8 South Chaoyang Park Road, Beijing 100026, PRC

(4) PARTY D: LIU DELE, a PRC citizen whose PRC identification number is 310101196805284437 and whose residential address is, 1701 Tower D, Sunz Garden, 98 Jianguo Road, Beijing , PRC

(Individually a “Party”, and collectively the “Parties”)

WHEREAS:

A. Party A is a wholly foreign-owned enterprise registered in the PRC;

B. Party B is a wholly domestic-owned company registered in the PRC and is approved by relevant governmental authorities to engage in the advertising agency and publishing businesses;

C. A business relationship has been established between Party A and Party B by entering into Exclusive Technical and Consulting Services Agreement, pursuant to which Party B is required to make all the stipulated payments to Party A. Therefore, the daily operations of Party B will have a material impact on its ability to pay the payables to Party A;

D. Party C and Party D are the shareholders of Party B, who own 80% and 20% equity interest, respectively, in Party B;

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E. The Parties concluded two business operations agreements in March, 2006 and November, 2007 (the “Previous Agreements”), which were in form and substance similar to this Agreement. The Parties have strictly performed and complied with all stipulations under the Previous Agreements. The Parties believe that it is in the best interest of the Parties to amend and restate the Previous Agreements.

THEREFORE, through friendly negotiation in the principle of equality and common interest, the Parties hereby jointly agree to abide by the following:

1. Effective Date

This Agreement shall be effective upon its being signed by the Parties hereunder (“Effective Date”).

2. Negative Undertakings

In order to ensure Party B's performance of the agreements between Party A and Party B and all its obligations born to Party A, Party B together with its shareholders Party C and Party D hereby jointly confirm and agree that unless Party B has obtained a prior written consent from Party A or another party appointed by Party A, Party B shall not conduct any transaction which may materially affect its assets, obligations, rights or operations, including but not limited to the following contents:

2.1 To conduct any business which is beyond the normal business scope;

2.2 To borrow money or incur any debt from any third party;

2.3 To change or dismiss any directors or to dismiss and replace any senior management members;

2.4 To sell to or acquire from any third party any assets or rights, including but not limited to any intellectual property rights;

2.5 To provide guarantee for any third party with its assets or intellectual property rights or to provide any other guarantee or to place any other obligations over its assets;

2.6 To amend the articles of association of the Party B or to change its business area;

2.7 To change the normal business process or modify any material company policy;

2.8 To assign any of the rights or obligations under this Agreement herein to any third party;

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2.9 To incur or assume any indebtedness.

3. Management of Operation and Arrangements of Human Resource

3.1 Party B together with its shareholders Party C and Party D hereby jointly agree to accept and strictly perform the proposals in respect of the employment and dismissal of its employees, the daily business management and financial management, etc., provided by Party A from time to time.

3.2 Party B together with its shareholders Party C and Party D hereby jointly and severally agree that Party C and Party D shall only appoint the personnel designated by Party A as the Executive Director or Directors of the Board of Directors of Party B in accordance with the procedures required by the applicable laws and regulations and the articles of association of Party B, and shall cause such Executive Director or Board of Directors of Party B to appoint the personnel designated by Party A as Party B’s General Manager, Chief Financial Officer, and other senior officers.

3.3 If any of the above officers resigns or is dismissed by Party A, he or she will lose the qualification to be appointed for any position in Party B and thereafter Party B, Party C and Party D shall appoint or cause the appointment of another candidate designated by Party A to assume such position.

3.4 For the purpose of the above-mentioned Section 3.3, Party B, Party C and Party D shall take all the necessary internal or external procedures to accomplish the above dismissal and engagement in accordance with the relevant laws and regulations, the articles of association of Party B and this Agreement.

3.5 Each of Party C and Party D hereby agrees to, upon the execution of this Agreement, simultaneously sign a Power of Attorney, pursuant to which each of Party C and Party D shall authorize the persons designated by Party A to exercise his or her shareholders' rights, including the full voting right of a shareholder at Party B's shareholders' meetings. Each of Party C and Party D further agrees to replace the authorized person appointed according to the above mentioned Power of Attorney at any time according to the requirement of Party A.

Party A hereby designates and authorizes Mr. Victor Wing Cheung Koo to serve as the person designated by Party A as noted in the preceding paragraph, until such time as Party A dismisses Mr. Victor Wing Cheung Koo as its authorized representative and replaces and authorizes another person to serve as his substitute. Each of Party C and Party D hereby confirms and acknowledges this designation and authorization.

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4. Other Agreements

4.1 Given (i) that the business relationship between Party A and Party B has been established through the Exclusive Technical and Consulting Services Agreement and (ii) that the daily business activities of Party B will have a material impact on Party B’s ability to pay the payables to Party A, each of Party C and Party D agrees that:

• he/she shall not put forward, or vote in favor of, any shareholder resolution to, or otherwise request Party B to, distribute profits, funds, assets or property to the shareholders of Party B or any of its affiliates; and

• he/she shall not put forward, or vote in favor of, any shareholder resolution to, or otherwise request Party B to, issue any dividends or other distributions with respect to the equity interest of Party B held by Party C or Party D; provided, however, if such dividends or other distributions are distributed to Party C and/or Party D from Party B, he/she will immediately and unconditionally pay or transfer to Party A any dividends or other distributions in whatsoever form obtained from Party B as a shareholder of Party B at the time such payables arise, after having deducted and paid any and all relevant taxes and expenses applicable to such a shareholder as a result of his/her receipt of such dividends or other distributions.

4.2 If any of Party C or Party D is held liable for any legal or any other responsibilities by reason of his/her performance of his/her obligations under this Agreement and as a shareholder of Party B, Party A shall keep each of Party C and Party D fully indemnified from any such liabilities, costs or losses (including but not limited to any and all legal expenses) incurred by Party C and/or Party D, provided that the actions perform by Part C and/or Party D according to his/her obligations under this Agreement and as a shareholder of Party B are taken in good faith and are not contrary to the best interests of Party A and Party B.

4.3 To ensure that the cash flow requirements of Party B’s ordinary operations are met and/or to set off any loss accrued during such operations, Party A is obligated, only to the extent permissible under PRC law, to provide financing support for Party B, whether or not Party B actually incurs any such operational loss. Party A’s financing support for Party B may take the form of bank entrusted loans or borrowings. Contracts for any such entrusted loans or borrowings shall be executed separately.

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5. Entire Agreement and Modifications

5.1 This Agreement together with all the other agreements and/or documents mentioned or specifically included in this Agreement, to which Party A, Party B, Party C and/or Party D is a party thereunder (where applicable) will be part of the whole agreements concluded in respect of the subject matters in this Agreement and shall replace all the other prior oral and written agreements, contracts, understandings and communications among all the parties involving the subject matters of this Agreement.

5.2 Any modification of this Agreement shall take effect only after it is executed by each and every Party. The amendment and supplement duly executed by each and every Party shall form part of this Agreement and shall have the same legal effect as this Agreement.

6. Governing Law

The execution, validity, performance, interpretation and disputes of this Agreement shall be governed by and construed in accordance with the PRC laws.

7. Dispute Resolution

7.1 The Parties shall strive to settle any dispute arising from the interpretation or performance of this Agreement through friendly consultation in good faith. In case no settlement can be reached through friendly consultation, each Party can submit such matter to the China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration in accordance with the then current rules of CIETAC. The arbitration proceedings shall take place in Beijing and shall be conducted in Chinese. The arbitration award shall be final and binding upon all the Parties. This article shall not be affected by the termination or elimination of this Agreement.

7.2 During the process of the dispute resolution, each Party shall continue to perform its obligations in good faith according to the provisions of this Agreement except for the subject matters in dispute.

8. Notice

8.1 Any notice that is given by the Parties hereto for the purpose of performing the rights and obligations hereunder shall be in written form. Where such notice is delivered personally, the actual delivery time is regarded as notice time; where such notice is transmitted by telex or facsimile, the notice time is the time when such notice is transmitted. If such notice (i) does not reach the addressee on a business day or (ii) reaches the addressee after the business hours, the next business day following such day is the date of notice. The written form includes facsimile and telex.

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8.2 Any notice or other correspondence hereunder provided shall be delivered to the following addresses in accordance with the above terms:

PARTY A	:	1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.
Address	:	Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	Victor Wing Cheung Koo
PARTY B	:	JIAHEYI ADVERTISING (BEIJING) CO., LTD.
Address	:	Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	QIN Qiong
PARTY C	:	QIN Qiong
Address	:	Room 1602, Tower 3, Palm Tree International Apartment, 8 South Chaoyang Park Road, Beijing100026, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	QIN Qiong
PARTY D	:	LIU Dele
Address	:	Room 1701, Tower D, Sunz Garden, 98 Jianguo Road, Chaoyang District, Beijing 100022., China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	LIU Dele

9. Effectiveness, Term and Others

9.1 This Agreement shall be executed by a duly authorized representative of each Party on the date first written above and become effective as of the Effective Date. The term of this agreement is ten years unless early termination occurs in accordance with the relevant provisions herein. This Agreement may extend automatically for another ten year period except that Party A provides a written notice stating its intention not to extend this Agreement three months prior to the expiration of the initial term of this Agreement.

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9.2 Party B, Party C and Party D shall not terminate this Agreement within the terms of this Agreement. Notwithstanding the above stipulation, Party A shall have the right to terminate this Agreement at any time by issuing a prior written notice to Party B, Party C and Party D thirty (30) days before the termination.

9.3 In case any terms and stipulations in this Agreement are regarded as illegal or can not be performed in accordance with the applicable laws, they shall be deemed to be deleted from this Agreement and lose their effect and this Agreement shall be treated as if they did not exist from the very beginning. However, the remaining stipulations will remain effective. Each Party shall replace the deleted stipulations with lawful and effective stipulations, which are acceptable to each Party, through mutual negotiation.

9.4 Any failure or delay on the part of any Party to exercise any rights, powers or privileges hereunder shall not operate as a waiver thereof. Any single or partial exercise of such rights, powers or privileges shall not preclude any further exercise of such rights, powers or privileges.

9.5 This Agreement amends and restates all Previous Agreements. In the event of any discrepancy between this Agreement and any Previous Agreement, this Agreement shall prevail to the extent of the discrepant provisions.

10. Languages and Counterparts

This Agreement is executed in Four (4) originals in English and each Party shall retain 1 original.

[The space below is intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

PARTY A: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo

PARTY B: JIAHEYI ADVERTISING (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Qin Qiong
Authorized Representative: QIN Qiong

PARTY C: QIN QIONG

By: /s/ Qin Qiong

PARTY D: LIU DELE

By: /s/ Liu Dele

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EX-10.7

Exhibit 10.7

AMENDED AND RESTATED

EQUITY INTEREST PLEDGE AGREEMENT

This Amended and Restated Equity Interest Pledge Agreement (this “Agreement”) is entered in Beijing, the People’s Republic of China (“PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for the purposes of this Agreement) and dated August 16, 2010 by and among the following parties:

(1) PLEDGEE: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

Registered Address: Sections A and C, 5/F, SinoSteel Plaza, No. 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: Victor Wing Cheung Koo

and

(2) PLEDGORS: QIN Qiong and LIU Dele

(individually a “Party” and collectively the “Parties”)

WHEREAS:

A. QIN Qiong and LIU Dele are PRC citizens, and respectively own 80% and 20% equity interest in 1Verge Information Technology (Beijing) Co., Ltd. (“Beijing 1Verge Infotech”).

B. Beijing 1Verge Infotech is a limited liability company registered in Beijing engaging in the business of Internet information services, value-added telecommunication services, etc.

C. The Pledgors and the Pledgee entered into an Amended and Restated Loan Agreement on August 16, 2010, pursuant to which the Pledgee extended certain loans in an aggregated amount of RMB 20,000,000 (the “Loans”) to the Pledgors (the “Loan Agreement”).

D. The Pledgee, a wholly foreign-owned company registered in Beijing, PRC, has been licensed by the PRC relevant government authority to carry on the business of computer software products and Internet products development, sale and services, etc. The Pledgee and Beijing 1Verge Infotech entered into an Amended and Restated Exclusive Technical and Consulting Services Agreement on August 16, 2010, pursuant to which Beijing 1Verge Infotech is required to pay service fees (the “Service Fees”) to the Pledgee in consideration of the corresponding services to be provided by the Pledgee (the “Services Agreement”). The Pledgee and Beijing 1Verge Infotech entered into an Amended and Restated Domain Name License Agreement and an Amended and Restated Trademark License Agreement on August 16, 2010, pursuant to which Beijing 1Verge Infotech is required to pay license fees (the “License Fees”) to the Pledgee in consideration of the corresponding license of the domain names and trademarks by the Pledgee (collectively, the “License Agreements”).

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E. Simultaneous with the execution of this Agreement, the Pledgors have also entered into an Amended and Restated Equity Option Agreement with the Pledgee, pursuant to which each of the Pledgors grants to the Pledgee an exclusive right to purchase the Equity Interest (as defined below) at any time upon satisfaction of various requirements under the PRC law (the “Option Agreement”).

F. In order to ensure that (i) the Pledgors repay the Loans under the Loan Agreement; (ii) the Pledgee collects Service Fees under the Services Agreement and License Fees under the License Agreements from Beijing 1Verge Infotech, (iii) the Pledgors’ other obligations under the Option Agreement are fulfilled, and (iv) all other debts, monetary liabilities or other payment obligations owed to the Pledgee by the Pledgors and/or Beijing 1Verge Infotech, arising under or in relation to the Services Agreement or the Loan Agreement, or the License Agreements including, but not limited to, any obligation to pay damages for a breach of any obligation of the Pledgors or Beijing 1Verge Infotech under the Loan Agreement or the Services Agreement or the License Agreements (as applicable), are paid, the Pledgors are willing to pledge all the Equity Interest (as defined below) in Beijing 1Verge Infotech to the Pledgee as security for the above-mentioned obligations of the Pledgors and Beijing 1Verge Infotech (collectively, the “Secured Obligations”).

In order to set forth each Party’s rights and obligations, the Pledgee and the Pledgors through mutual negotiations hereby enter into this Agreement based upon the following terms:

1. Definitions

Unless otherwise provided in this Agreement, the following terms shall have the following meanings:

1.1 “Pledge” means the full content of Section 2 hereunder.

1.2 “Equity Interest” means all the equity interests in Beijing 1Verge Infotech held by the relevant Pledgor (including all present and future rights and benefits based on such equity interests), and any additional equity interests in Beijing 1Verge Infotech acquired by such Pledgor subsequent to the date hereof. For the avoidance of any doubt, on the date hereof, QIN Qiong holds an 80% equity interests (amounting to RMB 16million) and LIU Dele holds a 20% equity interests (amounting to RMB 4million) in Beijing 1Verge Infotech.

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1.3 “Event of Default” means any event in accordance with Section 6 hereunder.

1.4 “Notice of Default” means the notice of default issued by the Pledgee in accordance with this Agreement.

1A. “Effective Date”

This Agreement shall be effective upon its being signed by the Parties hereunder. Notwithstanding the foregoing, the Pledge (as defined in Section 2.1) shall only come into effect in accordance with Section 3 of this Agreement.

2. Pledge

2.1 Each Pledgor hereby pledges, and if required, transfers and assigns all his/her rights, titles and interests in the Equity Interest in Beijing 1Verge Infotech to the Pledgee as security for all of the Secured Obligations (the “Pledge”) of an amount up to the Maximum Amount (as defined below), and grant a first priority security interest in all rights, titles and interests that he/she has or may at any time hereafter acquire in and to the Equity Interest, together with all equity or other ownership interests representing a dividend on the Equity Interest, a distribution or return of capital upon or in respect of such Equity Interest, any subscription, first refusal, pre-emptive or other purchase rights with respect to or arising from such Equity Interest, any voting rights with respect to such Equity Interest or any other interest in Beijing 1Verge Infotech which, by reason of notice or lapse of time or the occurrence of other events, may be converted into a direct equity interest in Beijing 1Verge Infotech, and all proceeds of the foregoing (collectively, the “Pledged Collateral”).

2.1.1 The Parties understand and agree that the monetary valuation arising from, relating to or in connection with the Secured Obligations shall be a variable and floating valuation until the Settlement Date (as defined below). Therefore, based on the reasonable assessment and evaluation by the Pledgors and the Pledgee of the Secured Obligations and the Pledged Collateral, the Pledgors and the Pledgee mutually acknowledge and agree that the Pledge shall aggregately secure the Secured Obligations for a maximum amount of RMB 31,000,000 (the “Maximum Amount”) prior to the Settlement Date.

The Pledgors and the Pledgee may, taking into account the fluctuation in the monetary value of the Secured Obligations and the Pledged Collateral, adjust the Maximum Amount based on mutual agreement by amending and supplementing this Agreement, from time to time, prior to the Settlement Date.

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2.1.2 Upon the occurrence of any of the events below (each an “Event of Settlement”), the Secured Obligations shall be fixed at a value of the sum of all Secured Obligations that are due, outstanding and payable to the Pledgee on or immediately prior to the date of such occurrence (the “Fixed Obligations”):

(a) any or all of the Loan Agreements, Services Agreements, License Agreements or the Option Agreements expires or is terminated pursuant to the stipulations thereunder;

(b) the occurrence of an Event of Default pursuant to Section 6 that is not resolved, which results in the Pledgee serving a Notice of Default to the relevant Pledgor(s) pursuant to Section 6.3;

(c) the Pledgee reasonably determines (having made due enquiries) that any of the Pledgors and/or Beijing 1Verge Infotech is insolvent or could potentially be made insolvent; or

(d) any other event that requires the settlement of the Secured Obligations in accordance with relevant laws of the PRC.

2.2 For the avoidance of doubt, the day of the occurrence of an Event of Settlement shall be the settlement date (the “Settlement Date”). On or after the Settlement Date, the Pledgee shall be entitled, at the election of the Pledgee, to enforce the Pledge in accordance with Section 7.

2.3 The Pledgee is entitled to collect dividends or other distributions, if any, arising from the Equity Interest during the Term of the Pledge (as defined below).

3. Effectiveness of Pledge, Scope and Term

3.1 The Pledgors shall, promptly after the execution of this Agreement, but in no event later than 10 days from the date of this Agreement, register this Agreement and the Pledge hereunder with the State Administration for Industry and Commerce of the PRC or its competent local counterpart (the “AIC”). The Pledgors shall deliver to the Pledgee a copy of the registration or filing certificate from the AIC within 7 days from the date of submission of the application for registration of this Agreement and Pledge with the AIC.

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3.2 The Pledge shall be effective upon the registration of the Pledge with the AIC in accordance with Section 3.1 above. The term of the Pledge shall commence on the date when the Pledge is registered with the AIC and shall expire on the earlier of (a) the date on which all outstanding Secured Obligations are paid in full or otherwise satisfied (as applicable) or (b) the Pledgee enforces the Pledge pursuant to the terms and conditions hereof, to satisfy its rights under the Secured Obligations and Pledged Collateral in full (the “Term of the Pledge”).

4. Representations and Warranties of the Pledgors

Each of the Pledgors hereby makes the following representations and warranties to the Pledgee and confirms that the Pledgee executes this Agreement in reliance on such representations and warranties:

4.1 Each of the Pledgors is the legal owner of the Equity Interest that has been registered in his/her name, and is entitled to create a pledge on such Equity Interest.

4.2 None of the Pledged Collateral or the Pledge will be interfered with by any other pledgee at any time once the Pledgee exercises the rights of the Pledge in accordance with this Agreement.

4.3 The Pledgee shall be entitled to dispose or assign the Pledge in accordance with the relevant laws and this Agreement.

4.4 All necessary authorizations have been obtained for the execution and performance of this Agreement by each of the Pledgors and the execution and performance of this Agreement by each of the Pledgors does not violate any applicable laws or regulations. The representative of each of the Pledgors who signs this Agreement is lawfully and effectively authorized.

4.5 Each of the Pledgors warrants that there is no on-going civil, administrative or criminal litigation or administrative punishment or arbitration related to the Equity Interest and is not aware of any such action pending or likely to be pending in the future as of the date of this Agreement.

4.6 There are no outstanding taxes, fees or undecided legal procedures related to the Equity Interest as of the date of this Agreement.

4.7 Each stipulation hereunder is the expression of each Party’s true intention and shall be binding upon all the Parties.

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5. Covenants of the Pledgors

5.1 Each of the Pledgors covenants to the Pledgee that he/she shall:

5.1.1 not transfer or assign the Equity Interest, or create or permit to be created any pledge, lien, charge, mortgage, encumbrance, option, security or other interest in or over the Equity Interest that has been registered in his/her name, other than the Pledge created hereunder and the option granted under the Option Agreement, without the prior written consent from the Pledgee;

5.1.2 comply with and implement laws and regulations with respect to the pledge of rights, present to the Pledgee the notices, orders or suggestions with respect to the Pledge issued or made by the competent authority within 5 days upon receiving such notices, orders or suggestions and take actions in accordance with the reasonable instructions of the Pledgee; and

5.1.3 timely notify the Pledgee of any events or any received notices (i) which may affect the Equity Interest or any part of the Pledgee’s rights, (ii) which may change the Pledgors’ covenants or obligations under this Agreement or (iii) which may affect the Pledgors’ performance of their obligations under this Agreement, and take actions in accordance with the reasonable instructions of the Pledgee.

5.2 The Pledgors agree that the Pledgee’s right of exercising the Pledge under this Agreement shall not be suspended or hampered by the Pledgors or any successors of the Pledgors or any person authorized by the Pledgors.

5.3 The Pledgors jointly and severally covenant to the Pledgee that in order to protect or perfect the security over the Secured Obligations, the Pledgors shall (i) execute in good faith and cause other parties who have interests in the Pledge to execute all the forms, instruments, agreements (including those required for the registration and de-registration of the Pledge with the AIC), and/or (ii) take actions and cause other parties who have interests in the Pledge to take actions as required by the Pledgee and (iii) allow the Pledgee to exercise the rights and authorization vested in the Pledgee under this Agreement.

5.4 The Pledgors agree to promptly make or cause to be made any filings or records, give or cause to be given any notices and take or cause to be taken any other actions as may be necessary under the laws of the PRC, to perfect the Pledge of the Pledged Collateral, including the AIC registration set forth in Section 3.1.

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5.5 Each of the Pledgors covenants to the Pledgee that he/she will comply with and perform all the guarantees, covenants, agreements, representations and conditions for the benefits of the Pledgee. The Pledgor shall compensate for all the losses suffered by the Pledgee for such Pledgor’s failure to perform or fully perform his/her guarantees, covenants, agreements, representations or conditions.

6. Events of Default

6.1 Each of the following shall constitute an Event of Default:

6.1.1 Beijing 1Verge Infotech or any of the Pledgors fails to make full and timely payment of any amounts due under the Secured Obligations as required under the Services Agreement, License Agreements, Loan Agreement or Option Agreement, or an event of default (as defined and stipulated in those agreements) has occurred and is continuing;

6.1.2 any of the Pledgors makes or has made any inaccurate, incomplete, misleading or untrue representations or warranties under Section 4, or is in violation or breach of any of the representations and warranties under Section 4;

6.1.3 any of the Pledgors breaches any of the covenants under Section 5;

6.1.4 any of the Pledgors breaches any other covenants, undertakings or obligations of the Pledgors set forth herein;

6.1.5 any of the Pledgors is unable to perform its obligations under this Agreement due to the separation or merger of Beijing 1Verge Infotech with other third parties or for any other reason;

6.1.6 any of the Pledgors relinquishes all or any part of the Pledged Collateral or transfers or assigns all or any part of the Pledged Collateral without the prior written consent of the Pledgee (except the transfers or assigns permitted under the Option Agreement);

6.1.7 any indebtedness, guarantee or other obligation of any of the Pledgors, whether pursuant to a contract or otherwise, (i) is accelerated as a result of a default thereunder and is required to be repaid or performed prior to the due date; or (ii) has become due and is not repaid or performed when due which, in the Pledgee’s reasonable view, has materially adversely affected the Pledgor’s ability to perform their obligations under this Agreement;

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6.1.8 this Agreement is illegal as a result of any applicable laws or any of the Pledgors is restricted from continuing to perform his/her obligations under this Agreement;

6.1.9 any approval, permit, license or authorization from any applicable governmental entity (or registration or filing procedure) required for Beijing 1Verge Infotech to provide Internet information services and/or value-added telecommunications services in the PRC is withdrawn, suspended, invalidated or materially amended;

6.1.10 any approval, permit, license or authorization from any applicable government authority required to perform this Agreement or make this Agreement enforceable, legal and valid is withdrawn, suspended, invalidated or materially amended; or

6.1.11 any property owned by the Pledgor is altered or damaged which, in the Pledgee’s reasonable view, has materially adversely affected the Pledgor’s ability to perform their obligations under this Agreement.

6.2 The Pledgors shall immediately give a written notice to the Pledgee if any of the Pledgors is aware or find that any event set forth in Section 6.1 or any events that may result in the foregoing events have occurred or are occurring.

6.3 Unless an Event of Default set forth in Section 6.1 has been rectified to the Pledgee’s satisfaction, the Pledgee, at any time the event of default occurs or thereafter, may give a written notice of default to any or both Pledgors, and require such Pledgor(s), at the discretion of the Pledgee, to immediately make full payment of the outstanding amounts payable under the Loan Agreements, Services Agreements, License Agreements, and/or Option Agreements, and other payables, or dispose of the Pledge in accordance with Section 7 herein.

7. Exercise of the Rights of the Pledge

7.1 The Pledgors shall not transfer or assign the Pledge without prior written approval from the Pledgee prior to the full settlement and fulfillment of the Secured Obligations.

7.2 The Pledgee shall give a notice of default to the Pledgor(s) when the Pledgee exercises the rights of Pledge.

7.3 Subject to Section 6.3, the Pledgee may exercise the right to dispose of the Pledge at any time when the Pledgee gives a notice of default in accordance with Section 6.3 or thereafter.

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Equity Interest Pledge Agreement	-8-

7.4 The Pledgee is entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale of whole or part of the Pledged Collateral in accordance with legal procedures until the outstanding Secured Obligation or other monetary obligations payable by the Pledgors and/or Beijing 1Verge Infotech is fully paid, repaid or otherwise settled.

7.5 The Pledgors shall not hinder the Pledgee from disposing the Pledge in accordance with this Agreement and shall give necessary assistance so that the Pledgee could realize his Pledge.

8. Transfer or Assignment

8.1 The Pledgors shall not donate or transfer their rights and obligations herein to any third party without prior written consent from the Pledgee.

8.2 This Agreement shall be binding upon the Pledgors and their successors and be effective to the Pledgee and his each successor and assignee.

8.3 The Pledgee may transfer or assign all Secured Obligations and its right to the Pledge to any third party at any time. In this case, the assignee shall enjoy and undertake the same rights and obligations herein of the Pledgee as if the assignee is a party hereto. When the Pledgee transfers or assigns the Secured Obligations and its rights to the Pledge, at the request of the Pledgee, the Pledgors shall execute the relevant agreements and/or documents with respect to such transfer or assignment.

8.4 After a change to the Pledgee resulting from a transfer or assignment, the new parties to the pledge shall re-execute a pledge contract.

9. Termination

This Agreement shall not terminate until the Term of the Pledge expires pursuant to Section 3 herein.

10. Force Majeure

10.1 If this Agreement is delayed in or prevented from performing in the Event of Force Majeure (“Event of Force Majeure”), only within the limitation of such delay or prevention, the affected Party is absolved from any liability under this Agreement. Force Majeure, which includes acts of governments, acts of nature, fire, explosion, geographic change, flood, earthquake, tide, lightning, war, means any unforeseen events beyond the prevented Party’s reasonable control and cannot be prevented with reasonable care. However, any shortage of credit, capital or finance shall not be regarded as an event beyond a Party’s reasonable control. The Party affected by Force Majeure who claims for exemption from performing any obligations under this Agreement or under any Section herein shall notify the other party of such exemption promptly and advice him of the steps to be taken for completion of the performance.

Amended and Restated
Equity Interest Pledge Agreement	-9-

10.2 The Party affected by Force Majeure shall not assume any liability under this Agreement. However, subject to the Party affected by Force Majeure having taken its reasonable and practicable efforts to perform this Agreement, the Party claiming for exemption of the liabilities may only be exempted from performing such liability as within limitation of the part performance delayed or prevented by Force Majeure. Once causes for such exemption of liabilities are rectified and remedied, both parties agree to resume performance of this Agreement with their best efforts.

11. Applicable Law and Dispute Resolution

11.1 The execution, validity, performance and interpretation of this Agreement shall be governed by and construed in accordance with the laws of the PRC.

11.2 The Parties shall strive to settle any dispute arising from the interpretation or performance through friendly consultation. In case no settlement can be reached through consultation, each party can submit such matter to China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration. The arbitration shall follow the then current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese and shall take place in Beijing. The arbitration award shall be final and binding upon the Parties. This article shall not be affected by the termination or elimination of this Agreement.

11.3 In case of any disputes arising out of the interpretation and performance of this Agreement or any pending arbitration of such dispute, each Party shall continue to perform their obligations under this Agreement, except for the matters in dispute.

Amended and Restated
Equity Interest Pledge Agreement	-10-

12. Notice

Any notice or correspondence, which is given by the Party as stipulated hereunder, shall be in Chinese and English writing and shall be delivered in person or by registered or prepaid mail or recognized express service, or be transmitted by telex or facsimile to the following addresses:

PLEDGEE	:	1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.
Address	:	Sections A and C, 5/F, SinoSteel Plaza, No. 8, Haidian Street, Haidian District, Beijing, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	Victor Wing Cheung Koo
QIN Qiong
Address	:	Room 1602, Tower 3, Palm Tree International Apartment, 8 South Chaoyang Park Road, Beijing 100026, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	QIN Qiong
LIU Dele
Address	:	Room 1701, Tower D, Sunz Garden, 98 Jianguo Road, Chaoyang District, Beijing 100022, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	Liu Dele

13. Appendices

The appendices to this Agreement constitute an integral part of this Agreement.

14. Waiver

The Pledgee’s non-exercise or delay in exercise of any rights, remedies, power or privileges hereunder shall not be deemed as the waiver of such rights, remedies, power or privileges. Any single or partial exercise of the rights, remedies, power and privileges shall not exclude the Pledgee from exercising any other rights, remedies, power and privileges. The rights, remedies, power and privileges hereunder are accumulative and shall not exclude the application of any other rights, remedies, power and privileges stipulated by laws.

15. Miscellaneous

15.1 Any amendments, modifications or supplements to this Agreement shall be in writing and come into effect upon being executed and sealed by the Parties hereto.

15.2 In case any terms and stipulations in this Agreement are regarded as illegal or can not be performed in accordance with the applicable law, such terms and stipulations shall be deemed to ineffective and not enforceable within the scope governed by the applicable law, and the remaining stipulations will remain effective.

Amended and Restated
Equity Interest Pledge Agreement	-11-

15.3 This Agreement amends and restates all Equity Interest Pledge Agreements entered into by and among the Pledgors, the Pledgee and Jiaheyi Advertising (Beijing) Co., Ltd. with respect to the Pledge of the Pledged Collateral to the Pledgee as a security for any and all Secured Obligations (“Previous Agreements”). In the event of any discrepancy between this Agreement and any Previous Agreement, this Agreement shall prevail to the extent of the discrepant provisions.

[The space below is intentionally left blank.]

Amended and Restated
Equity Interest Pledge Agreement	-12-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

PLEDGEE: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo

PLEDGOR: QIN QIONG

By: /s/ Qin Qiong

PLEDGOR: LIU DELE

By: /s/ Liu Dele

Amended and Restated
Equity Interest Pledge Agreement	-13-

EX-10.8

Exhibit 10.8

AMENDED AND RESTATED

EQUITY INTEREST PLEDGE AGREEMENT

This Amended and Restated Equity Interest Pledge Agreement (this “Agreement”) is entered in Beijing, the People’s Republic of China (“PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for the purposes of this Agreement) and dated 27 September, 2010 by and among the following parties:

(1) PLEDGEE: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

Legal Address: Section A and C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: Victor Wing Cheung Koo

and

(2) PLEDGORS: QIN Qiong and LIU Dele

(individually a “Party” and collectively the “Parties”)

WHEREAS:

A. QIN Qiong and LIU Dele are PRC citizens, and respectively own an 80% and 20% equity interest in Jiaheyi Advertising (Beijing) Co., Ltd. (“Jiaheyi”).

B. Jiaheyi is a limited liability company registered in Beijing engaging in the advertising agency and publishing businesses.

C. The Pledgors and the Pledgee entered into an Amended and Restated Loan Agreement on 16 August 2010(the “Loan Agreements”), pursuant to which the Pledgee extended a loan in an aggregated amount of RMB 80,000 to QIN Qiong and RMB20,000 to LIU Dele (collectively, the “Loans”).

D. The Pledgee, a wholly foreign-owned company registered in Beijing, PRC, has been licensed by the PRC relevant government authority to carry on the business of computer software products and Internet products development, sale and services, etc. Jiaheyi entered into an Amended and Restated Exclusive Technical and Consulting Services Agreement (the “Services Agreement”) and the Pledgee on 16 August 2010, pursuant to which Jiaheyi is required to pay service fee (the “Service Fee”) to the Pledgee in consideration of the corresponding services to be provided by the Pledgee.

E. The Pledgors have also entered into an Amended and Restated Equity Option Agreement (the “Option Agreement”) with the Pledgee, pursuant to which each of the Pledgors grants to the Pledgee an exclusive right to purchase the Equity Interest (as defined below).

Amended and Restated
Equity Interest Pledge Agreement	-1-

F. In order to ensure that (i) the Pledgors repay the Loans under the Loan Agreement; (ii) the Pledgee collects Service Fees under the Services Agreement from Jiaheyi, (iii) the Pledgors’ other obligations under the Option Agreement are fulfilled, and (iv) all other debts, monetary liabilities or other payment obligations owed to the Pledgee by the Pledgors and/or Jiaheyi, arising under or in relation to the Services Agreement or the Loan Agreement, including, but not limited to, any obligation to pay damages for a breach of any obligation of the Pledgors or Jiaheyi under the Loan Agreement or the Services Agreement (as applicable), are paid, the Pledgors are willing to pledge all the Equity Interest (as defined below) in Jiaheyi to the Pledgee as security for the above-mentioned obligations of the Pledgors and Jiaheyi (collectively, the “Secured Obligations”).

In order to set forth each Party’s rights and obligations, the Pledgee and the Pledgors through mutual negotiations hereby enter into this Agreement based upon the following terms:

1. Definitions

Unless otherwise provided in this Agreement, the following terms shall have the following meanings:

1.1 “Pledge” means the full content of Section 2 hereunder.

1.2 “Equity Interest” means all the equity interests in Jiaheyi held by the relevant Pledgor (including all present and future rights and benefits based on such equity interests), and any additional equity interests in Jiaheyi acquired by such Pledgor subsequent to the date hereof. For the avoidance of any doubt, on the date hereof, QIN Qiong holds an 80% equity interest (amounting to RMB80,000) and LIU Dele holds a 20% equity interest (amounting to RMB 20,000) in Jiaheyi.

1.3 “Event of Default” means any event in accordance with Section 6 hereunder.

1.4 “Notice of Default” means the notice of default issued by the Pledgee in accordance with this Agreement.

1.A. “Effective Date”

this Agreement shall be effective upon its being signed by the Parties hereunder. Notwithstanding the foregoing, the Pledge (as defined in Section 2.1) shall only come into effect in accordance with Section 3 of this Agreement.

Amended and Restated
Equity Interest Pledge Agreement	-2-

2. Pledge

2.1 Each Pledgor hereby pledges, and if required, transfers and assigns all his/her rights, titles and interests in the Equity Interest in Jiaheyi to the Pledgee as security for all of the Secured Obligations (the “Pledge”) of an amount up to the Maximum Amount (as defined below), and grant a first priority security interest in all rights, titles and interests that he/she has or may at any time hereafter acquire in and to the Equity Interest, together with all equity or other ownership interests representing a dividend on the Equity Interest, a distribution or return of capital upon or in respect of such Equity Interest, any subscription, first refusal, pre-emptive or other purchase rights with respect to or arising from such Equity Interest, any voting rights with respect to such Equity Interest or any other interest which, by reason of notice or lapse of time or the occurrence of other events, may be converted into a direct equity interest in Jiaheyi, and all proceeds of the foregoing (collectively, the “Pledged Collateral”).

2.1.1 The Parties understand and agree that the monetary valuation arising from, relating to or in connection with the Secured Obligations shall be a variable and floating valuation until the Settlement Date (as defined below). Therefore, based on the reasonable assessment and evaluation by the Pledgors and the Pledgee of the Secured Obligations and the Pledged Collateral, the Pledgors and the Pledgee mutually acknowledge and agree that the Pledge shall aggregately secure the Secured Obligations for a maximum amount of RMB 31,000,000 (the “Maximum Amount”) prior to the Settlement Date.

The Pledgors and the Pledgee may, taking into account the fluctuation in the monetary value of the Secured Obligations and the Pledged Collateral, adjust the Maximum Amount based on mutual agreement by amending and supplementing this Agreement, from time to time, prior to the Settlement Date.

2.1.2 Upon the occurrence of any of the events below (each an “Event of Settlement”), the Secured Obligations shall be fixed at a value of the sum of all Secured Obligations that are due, outstanding and payable to the Pledgee on or immediately prior to the date of such occurrence (the “Fixed Obligations”):

(a) any or all of the Loan Agreements, Services Agreements or the Option Agreements expires or is terminated pursuant to the stipulations thereunder;

(b) the occurrence of an Event of Default pursuant to Section 6 that is not resolved, which results in the Pledgee serving a Notice of Default to the relevant Pledgor(s) pursuant to Section 6.3;

Amended and Restated
Equity Interest Pledge Agreement	-3-

(c) the Pledgee reasonably determines (having made due enquiries) that any of the Pledgors and/or Jiaheyi is insolvent or could potentially be made insolvent; or

(d) any other event that requires the settlement of the Secured Obligations in accordance with relevant laws of the PRC.

2.2 For the avoidance of doubt, the day of the occurrence of an Event of Settlement shall be the settlement date (the “Settlement Date”). On or after the Settlement Date, the Pledgee shall be entitled, at the election of the Pledgee, to enforce the Pledge in accordance with Section 7.

2.3 The Pledgee is entitled to collect dividends or other distributions, if any, arising from the Equity Interest during the Term of the Pledge (as defined below).

3. Effectiveness of Pledge, Scope and Term

3.1 The Pledgors shall, promptly after the execution of this Agreement, register this Agreement and the Pledge hereunder with the State Administration for Industry and Commerce of the PRC or its competent local counterpart (the “AIC”). The Pledgors shall deliver to the Pledgee a copy of the registration or filing certificate from the AIC within 7 days from the date of submission of the application for registration of this Agreement and Pledge with the AIC.

3.2 The Pledge shall be effective upon the registration of the Pledge with the AIC in accordance with Section 3.1 above. The term of the Pledge shall commence on the date when the Pledge is registered with the AIC and shall expire on the earlier of (a) the date on which all outstanding Secured Obligations are paid in full or otherwise satisfied (as applicable) or (b) the Pledgee enforces the Pledge pursuant to the terms and conditions hereof, to satisfy its rights under the Secured Obligations and Pledged Collateral in full (the “Term of the Pledge”).

4. Representations and Warranties of the Pledgors

Each of the Pledgors hereby makes the following representations and warranties to the Pledgee and confirms that the Pledgee executes this Agreement in reliance on such representations and warranties:

4.1 Each of the Pledgors is the legal owner of the Equity Interest that has been registered in his/her name, and is entitled to create a pledge on such Equity Interest.

Amended and Restated
Equity Interest Pledge Agreement	-4-

4.2 None of the Pledged Collateral or the Pledge will be interfered with by any other parties at any time once the Pledgee exercises the rights of the Pledge in accordance with this Agreement.

4.3 The Pledgee shall be entitled to dispose or assign the Pledge in accordance with the relevant laws and this Agreement.

4.4 All necessary authorizations have been obtained for the execution and performance of this Agreement by each of the Pledgors and the execution and performance of this Agreement by each of the Pledgors does not violate any applicable laws or regulations. The representative of each of the Pledgors who signs this Agreement is lawfully and effectively authorized.

4.5 Each of the Pledgors warrants that there is no on-going civil, administrative or criminal litigation or administrative punishment or arbitration related to the Equity Interest and is not aware of any such action pending or likely to be pending in the future as of the date of this Agreement.

4.6 There are no outstanding taxes, fees or undecided legal procedures related to the Equity Interest as of the date of this Agreement.

4.7 Each stipulation hereunder is the expression of each Party’s true intention and shall be binding upon all the Parties.

5. Covenants of the Pledgors

5.1 Each of the Pledgors covenants to the Pledgee that he/she shall:

5.1.1 not transfer or assign the Equity Interest, or create or permit to be created any pledge, lien, charge, mortgage, encumbrance, option, security or other interest in or over the Equity Interest that has been registered in his/her name, other than the Pledge created hereunder and the option granted under the Option Agreement, without the prior written consent from the Pledgee;

5.1.2 comply with and implement laws and regulations with respect to the pledge of rights, present to the Pledgee the notices, orders or suggestions with respect to the Pledge issued or made by the competent authority within 5 days upon receiving such notices, orders or suggestions and take actions in accordance with the reasonable instructions of the Pledgee; and

5.1.3 timely notify the Pledgee of any events or any received notices (i) which may affect the Equity Interest or any part of the Pledgee’s rights, (ii) which may change the Pledgors’ covenants or obligations under this Agreement or (iii) which may affect the Pledgors’ performance of their obligations under this Agreement, and take actions in accordance with the reasonable instructions of the Pledgee.

Amended and Restated
Equity Interest Pledge Agreement	-5-

5.2 The Pledgors agree that the Pledgee’s right of exercising the Pledge under this Agreement shall not be suspended or hampered by the Pledgors or any successors of the Pledgors or any person authorized by the Pledgors.

5.3 The Pledgors jointly and severally covenant to the Pledgee that in order to protect or perfect the security over the Secured Obligations, the Pledgors shall (i) execute in good faith and cause other parties who have interests in the Pledge to execute all the forms, instruments, agreements (including those required for the registration and de-registration of the Pledge with the AIC), and/or (ii) take actions and cause other parties who have interests in the Pledge to take actions as required by the Pledgee and (iii) allow the Pledgee to exercise the rights and authorization vested in the Pledgee under this Agreement.

5.4 The Pledgors agree to promptly make or cause to be made any filings or records, give or cause to be given any notices and take or cause to be taken any other actions as may be necessary under the laws of the PRC, to perfect the Pledge of the Pledged Collateral, including the AIC registration set forth in Section 3.1.

5.5 Each of the Pledgors covenants to the Pledgee that he/she will comply with and perform all the guarantees, covenants, agreements, representations and conditions for the benefits of the Pledgee. The Pledgor shall compensate for all the losses suffered by the Pledgee for such Pledgor’s failure to perform or fully perform his/her guarantees, covenants, agreements, representations or conditions.

6. Events of Default

6.1 Each of the following shall constitute an Event of Default:

6.1.1 Any of the Pledgors and/or Jiaheyi fails to make full and timely payment of any amounts due under the Secured Obligations as required under the Services Agreement, Loan Agreement or Option Agreement, or an event of default (as defined and stipulated in those agreements) has occurred and is continuing;

6.1.2 any of the Pledgors makes or has made any inaccurate, incomplete, misleading or untrue representations or warranties under Section 4, or is in violation or breach of any of the representations and warranties under Section 4;

Amended and Restated
Equity Interest Pledge Agreement	-6-

6.1.3 any of the Pledgors breaches any of the covenants under Section 5;

6.1.4 any of the Pledgors breaches any other covenants, undertakings or obligations of the Pledgors set forth herein;

6.1.5 any of the Pledgors is unable to perform its obligations under this Agreement due to the separation or merger of Jiaheyi with other third parties or for any other reason;

6.1.6 any of the Pledgors relinquishes all or any part of the Pledged Collateral or transfers or assigns all or any part of the Pledged Collateral without the prior written consent of the Pledgee (except the transfers or assigns permitted under the Option Agreement);

6.1.7 any indebtedness, guarantee or other obligation of any of the Pledgors and/or Jiaheyi, whether pursuant to a contract or otherwise, (i) is accelerated as a result of a default thereunder and is required to be repaid or performed prior to the due date; or (ii) has become due and is not repaid or performed when due which, in the Pledgee’s reasonable view, has materially adversely affected the Pledgor’s ability to perform their obligations under this Agreement;

6.1.8 this Agreement is illegal as a result of any applicable laws or any of the Pledgors is restricted from continuing to perform his/her obligations under this Agreement;

6.1.9 any approval, permit, license or authorization from any applicable governmental entity (or registration or filing procedure) required for Jiaheyi to engage in the advertising agency and publishing businesses in the PRC is withdrawn, suspended, invalidated or materially amended;

6.1.10 any approval, permit, license or authorization from any applicable government authority required to perform this Agreement or make this Agreement enforceable, legal and valid is withdrawn, suspended, invalidated or materially amended; or

6.1.11 any property owned by the Pledgor is altered or damaged which, in the Pledgee’s reasonable view, has materially adversely affected the Pledgor’s ability to perform their obligations under this Agreement.

6.2 The Pledgors shall immediately give a written notice to the Pledgee if any of the Pledgors is aware or find that any event set forth in Section 6.1 or any events that may result in the foregoing events have occurred or are occurring.

Amended and Restated
Equity Interest Pledge Agreement	-7-

6.3 Unless an Event of Default set forth in Section 6.1 has been rectified to the Pledgee’s satisfaction, the Pledgee, at any time the event of default occurs or thereafter, may give a written notice of default to any or both Pledgors, and require such Pledgor(s) and/or Jiaheyi, at the discretion of the Pledgee, to immediately make full payment of the outstanding amounts payable under the Loan Agreements, Services Agreements, and/or Option Agreements (as the case may be), and other payables, or dispose of the Pledge in accordance with Section 7 herein.

7. Exercise of the Rights of the Pledge

7.1 The Pledgors shall not transfer or assign the Pledge without prior written approval from the Pledgee prior to the full settlement and fulfillment of the Secured Obligations.

7.2 The Pledgee shall give a notice of default to the Pledgor(s) when the Pledgee exercises the rights of Pledge.

7.3 Subject to Section 6.3, the Pledgee may exercise the right to dispose of the Pledge at any time when the Pledgee gives a notice of default in accordance with Section 6.3 or thereafter.

7.4 The Pledgee is entitled to have priority in receiving proceeds from the auction or sale of all or part of the Pledged Collateral in accordance with legal procedures until the outstanding Secured Obligation or other monetary obligations payable by the Pledgors and/or Jiaheyi is fully paid, repaid or otherwise settled.

7.5 The Pledgors shall not hinder the Pledgee from disposing the Pledge in accordance with this Agreement and shall give necessary assistance so that the Pledgee could realize his Pledge.

8. Transfer or Assignment

8.1 The Pledgors shall not donate or transfer their rights and obligations herein to any third party without prior written consent from the Pledgee.

8.2 This Agreement shall be binding upon the Pledgors and their successors and be effective to the Pledgee and his each successor and assignee.

8.3 The Pledgee may transfer or assign all Secured Obligations and its right to the Pledge to any third party at any time. In this case, the assignee shall enjoy and undertake the same rights and obligations herein of the Pledgee as if the assignee is a party hereto. When the Pledgee transfers or assigns the Secured Obligations and its rights to the Pledge, at the request of the Pledgee, the Pledgors shall execute the relevant agreements and/or documents with respect to such transfer or assignment.

Amended and Restated
Equity Interest Pledge Agreement	-8-

8.4 After a change to the Pledgee resulting from a transfer or assignment, the new parties to the pledge shall re-execute a pledge contract.

9. Termination

This Agreement shall not terminate until the Term of the Pledge expires pursuant to Section 3 herein.

10. Force Majeure

10.1 If this Agreement is delayed in or prevented from performing in the Event of Force Majeure (“Event of Force Majeure”), only within the limitation of such delay or prevention, the affected Party is absolved from any liability under this Agreement. Force Majeure, which includes acts of governments, acts of nature, fire, explosion, geographic change, flood, earthquake, tide, lightning, war, means any unforeseen events beyond the prevented Party’s reasonable control and cannot be prevented with reasonable care. However, any shortage of credit, capital or finance shall not be regarded as an event beyond a Party’s reasonable control. The Party affected by Force Majeure who claims for exemption from performing any obligations under this Agreement or under any Section herein shall notify the other party of such exemption promptly and advice him of the steps to be taken for completion of the performance.

10.2 The Party affected by Force Majeure shall not assume any liability under this Agreement. However, subject to the Party affected by Force Majeure having taken its reasonable and practicable efforts to perform this Agreement, the Party claiming for exemption of the liabilities may only be exempted from performing such liability as within limitation of the part performance delayed or prevented by Force Majeure. Once causes for such exemption of liabilities are rectified and remedied, both parties agree to resume performance of this Agreement with their best efforts.

11. Applicable Law and Dispute Resolution

11.1 The execution, validity, performance and interpretation of this Agreement shall be governed by and construed in accordance with the laws of the PRC.

Amended and Restated
Equity Interest Pledge Agreement	-9-

11.2 The Parties shall strive to settle any dispute arising from the interpretation or performance through friendly consultation. In case no settlement can be reached through consultation, each party can submit such matter to China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration. The arbitration shall follow the then current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese and shall take place in Beijing. The arbitration award shall be final and binding upon the Parties. This article shall not be affected by the termination or elimination of this Agreement.

11.3 In case of any disputes arising out of the interpretation and performance of this Agreement or any pending arbitration of such dispute, each Party shall continue to perform their obligations under this Agreement, except for the matters in dispute.

12. Notice

Any notice or correspondence, which is given by the Party as stipulated hereunder, shall be in Chinese and English writing and shall be delivered in person or by registered or prepaid mail or recognized express service, or be transmitted by telex or facsimile to the following addresses:

PLEDGEE	:	1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.
Address	:	Section A and C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	Victor Wing Cheung Koo
QIN Qiong
Address	:	Room 1602, Tower 3, Palm Tree International Apartment, 8 South Chaoyang Park Road, Beijing 100026, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	QIN Qiong
LIU Dele
Address	:	Room 1701, Tower D, Sunz Garden, 98 Jianguo Road, Chaoyang District, Beijing 100022, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	Liu Dele

13. Appendices

The appendices to this Agreement constitute an integral part of this Agreement.

Amended and Restated
Equity Interest Pledge Agreement	-10-

14. Waiver

The Pledgee’s non-exercise or delay in exercise of any rights, remedies, power or privileges hereunder shall not be deemed as the waiver of such rights, remedies, power or privileges. Any single or partial exercise of the rights, remedies, power and privileges shall not exclude the Pledgee from exercising any other rights, remedies, power and privileges. The rights, remedies, power and privileges hereunder are accumulative and shall not exclude the application of any other rights, remedies, power and privileges stipulated by laws.

15. Miscellaneous

15.1 Any amendments, modifications or supplements to this Agreement shall be in writing and come into effect upon being executed and sealed by the Parties hereto.

15.2 In case any terms and stipulations in this Agreement are regarded as illegal or can not be performed in accordance with the applicable law, such terms and stipulations shall be deemed to ineffective and not enforceable within the scope governed by the applicable law, and the remaining stipulations will remain effective.

15.3 This Agreement amends and restates all Equity Interest Pledge Agreements entered into by and among the Pledgors and the Pledgee with respect to the Pledge of the Pledged Collateral to the Pledgee as a security for any and all Secured Obligations (“Previous Agreements”). In the event of any discrepancy between this Agreement and any Previous Agreement, this Agreement shall prevail to the extent of the discrepant provisions.

[The space below is intentionally left blank.]

Amended and Restated
Equity Interest Pledge Agreement	-11-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

PLEDGEE: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo

PLEDGOR: QIN QIONG

By: /s/ Qin Qiong

PLEDGOR: LIU DELE

By: /s/ Liu Dele

Amended and Restated
Equity Interest Pledge Agreement	-12-

EX-10.9

Exhibit 10.9

POWER OF ATTORNEY

I, QIN Qiong, citizen of the People’s Republic of China (the “PRC”), PRC ID card number 310108197109214485, hereby irrevocably authorize Mr. Victor Wing Cheung Koo (“Mr. Koo”) to exercise the following powers and rights during the term of this Power of Attorney pursuant to Section 2.5 of the Amended and Restated Business Operations Agreement entered into among Mr. LIU Dele, 1Verge Internet Technology (Beijing) Co., Ltd (“1Verge Internet”), 1Verge Information Technology (Beijing) Co., Ltd. (“Beijing 1Verge Infotech”) and I on August 16, 2010 (the “Operations Agreement”) :

I hereby authorize and designate Mr. Koo to vote on my behalf at the shareholders’ meetings of Beijing 1Verge Infotech and exercise the full voting rights as its shareholder as granted to me by law and under the Articles of Association of Beijing 1Verge Infotech, including but not limited to, the right to propose the holding of shareholders’ meeting, to accept any notification about the holding and discussion procedure of the meeting, to attend the shareholders’ meeting of Beijing 1Verge Infotech and exercise the full voting rights (such as, my authorized representative on the shareholders’ meeting of the company, to designate and appoint the executive director or directors of the Board and the general manager and to decide the allotment of the profits, etc.), to sell or transfer any or all of my shares of Beijing 1Verge Infotech, etc.

The above authorization and designation are based upon the fact that Mr. Koo is acting as an employee of 1Verge Internet and 1Verge Internet has appointed and authorized Mr. Koo as its authorized representative in accordance with the Operations Agreement. Once Mr. Koo loses his title or position in 1Verge Internet or 1Verge Internet issues a written notice to dismiss or replace Mr. Koo with another person as its authorized representative, this Power of Attorney shall become invalid immediately and I will withdraw such authorization to him immediately and designate/authorize another individual(s) employed by 1Verge Internet to exercise all the rights mentioned above. I will sign another Power of Attorney in form and substance satisfactory to 1Verge Internet.

The term of this Power of Attorney is ten (10) years from its date of execution, unless the Operations Agreement is terminated early for any reason or the relevant events as outlined above occur.

I hereby further confirm and acknowledge that I executed a power of attorney that came into effect as of March 18, 2006 and was later replaced by another power of attorney executed by me in November 2007 (collectively, the “Previous POAs”). These Previous POAs were in form and substance similar to this Power of Attorney, and no changes to the terms and conditions of the Previous POAs were made after their respective executions. This Power of Attorney shall, upon becoming effective, replace the Previous POAs.

QIN Qiong

/s/ Qin Qiong

Date: August 16, 2010

POWER OF ATTORNEY

I, LIU Dele, citizen of the People’s Republic of China (the “PRC”), PRC ID card number 310101196805284437, hereby irrevocably authorize Mr. Victor Wing Cheung Koo (“Mr. Koo”) to exercise the following powers and rights during the term of this Power of Attorney pursuant to Section 2.5 of the Business Operations Agreement entered into among Ms. QIN Qiong, 1Verge Internet Technology (Beijing) Co., Ltd (“1Verge Internet”), 1Verge Information Technology (Beijing) Co., Ltd. (“Beijing 1Verge Infotech”) and I on August 16, 2010 (the “Operations Agreement”) :

I hereby authorize and designate Mr. Koo to vote on my behalf at the shareholders’ meetings of Beijing 1Verge Infotech and exercise the full voting rights as its shareholder as granted to me by law and under the Articles of Association of the Beijing 1Verge Infotech, including but not limited to, the right to propose the holding of shareholders’ meeting, to accept any notification about the holding and discussion procedure of the meeting, to attend the shareholders’ meeting of Beijing 1Verge Infotech and exercise the full voting rights (such as, my authorized representative on the shareholders’ meeting of the company, to designate and appoint the executive director or directors of the Board and the general manager and to decide the allotment of the profits, etc.), to sell or transfer any or all of my shares of Beijing 1Verge Infotech, etc.

The above authorization and designation are based upon the fact that Mr. Koo is acting as an employee of 1Verge Internet and 1Verge Internet has appointed and authorized Mr. Koo as its authorized representative in accordance with the Operations Agreement. Once Mr. Koo loses his title or position in 1Verge Internet or 1Verge Internet issues a written notice to dismiss or replace Mr. Koo with another person as its authorized representative, this Power of Attorney shall become invalid immediately and I will withdraw such authorization to him immediately and designate/authorize another individual(s) employed by 1Verge Internet to exercise all the rights mentioned above. I will sign another Power of Attorney in forms and substance satisfactory to 1Verge Internet.

The term of this Power of Attorney is ten (10) years from its date of execution, unless the Operations Agreement is terminated early for any reason or the relevant events as outlined above occur.

I hereby further confirm and acknowledge that I executed a power of attorney that came into effect as of March 18, 2006 and was later replaced by another power of attorney executed by me in November 2007 (collectively, the “Previous POAs”). These Previous POAs were in form and substance similar to this Power of Attorney, and no changes to the terms and conditions of the Previous POAs were made after their respective executions. This Power of Attorney shall, upon becoming effective, replace the Previous POAs.

LIU Dele

/s/ Liu Dele

Date: August 16, 2010

EX-10.10

Exhibit 10.10

POWER OF ATTORNEY

I, QIN Qiong, citizen of the People’s Republic of China (the “PRC”), PRC ID card number 310108197109214485, hereby irrevocably authorize Mr. Victor Wing Cheung Koo (“Mr. Koo”) to exercise the following powers and rights during the term of this Power of Attorney pursuant to Section 2.5 of the Amended and Restated Business Operations Agreement entered into among Mr. LIU Dele, 1Verge Internet Technology (Beijing) Co., Ltd (“1Verge Internet”), Jiaheyi Advertising (Beijing) Co., Ltd. (“Jiaheyi”) and I on August 16, 2010 (the “Operations Agreement”) :

I hereby authorize and designate Mr. Koo to vote on my behalf at the shareholders’ meetings of Jiaheyi and exercise the full voting rights as its shareholder as granted to me by law and under the Articles of Association of Jiaheyi, including but not limited to, the right to propose the holding of shareholders’ meeting, to accept any notification about the holding and discussion procedure of the meeting, to attend the shareholders’ meeting of Jiaheyi and exercise the full voting rights (such as, my authorized representative on the shareholders’ meeting of the company, to designate and appoint the executive director or directors of the Board and the general manager and to decide the allotment of the profits, etc.), to sell or transfer any or all of my shares of Jiaheyi, etc.

The above authorization and designation are based upon the fact that Mr. Koo is acting as an employee of 1Verge Internet and 1Verge Internet has appointed and authorized Mr. Koo as its authorized representative in accordance with the Operations Agreement. Once Mr. Koo loses his title or position in 1Verge Internet or 1Verge Internet issues a written notice to dismiss or replace Mr. Koo with another person as its authorized representative, this Power of Attorney shall become invalid immediately and I will withdraw such authorization to him immediately and designate/authorize another individual(s) employed by 1Verge Internet to exercise all the rights mentioned above. I will sign another Power of Attorney in form and substance satisfactory to 1Verge Internet.

The term of this Power of Attorney is ten (10) years from its date of execution, unless the Operations Agreement is terminated early for any reason or the relevant events as outlined above occur.

I hereby further confirm and acknowledge that I executed a power of attorney that came into effect as of March 18, 2006 and was later replaced by another power of attorney executed by me in November 2007 (collectively, the “Previous POAs”). These Previous POAs were in form and substance similar to this Power of Attorney, and no changes to the terms and conditions of the Previous POAs were made after their respective executions. This Power of Attorney shall, upon becoming effective, replace the Previous POAs.

QIN Qiong

/s/ Qin Qiong

Date: August 16, 2010

POWER OF ATTORNEY

I, LIU Dele, citizen of the People’s Republic of China (the “PRC”), PRC ID card number 310101196805284437, hereby irrevocably authorize Mr. Victor Wing Cheung Koo (“Mr. Koo”) to exercise the following powers and rights during the term of this Power of Attorney pursuant to Section 2.5 of the Business Operations Agreement entered into among Ms. QIN Qiong, 1Verge Internet Technology (Beijing) Co., Ltd (“1Verge Internet”), Jiaheyi Advertising (Beijing) Co., Ltd. (“Jiaheyi”) and I on August 16, 2010 (the “Operations Agreement”) :

I hereby authorize and designate Mr. Koo to vote on my behalf at the shareholders’ meetings of Jiaheyi and exercise the full voting rights as its shareholder as granted to me by law and under the Articles of Association of the Jiaheyi, including but not limited to, the right to propose the holding of shareholders’ meeting, to accept any notification about the holding and discussion procedure of the meeting, to attend the shareholders’ meeting of Jiaheyi and exercise the full voting rights (such as, my authorized representative on the shareholders’ meeting of the company, to designate and appoint the executive director or directors of the Board and the general manager and to decide the allotment of the profits, etc.), to sell or transfer any or all of my shares of Jiaheyi, etc.

The above authorization and designation are based upon the fact that Mr. Koo is acting as an employee of 1Verge Internet and 1Verge Internet has appointed and authorized Mr. Koo as its authorized representative in accordance with the Operations Agreement. Once Mr. Koo loses his title or position in 1Verge Internet or 1Verge Internet issues a written notice to dismiss or replace Mr. Koo with another person as its authorized representative, this Power of Attorney shall become invalid immediately and I will withdraw such authorization to him immediately and designate/authorize another individual(s) employed by 1Verge Internet to exercise all the rights mentioned above. I will sign another Power of Attorney in forms and substance satisfactory to 1Verge Internet.

The term of this Power of Attorney is ten (10) years from its date of execution, unless the Operations Agreement is terminated early for any reason or the relevant events as outlined above occur.

I hereby further confirm and acknowledge that I executed a power of attorney that came into effect as of March 18, 2006 and was later replaced by another power of attorney executed by me in November 2007 (collectively, the “Previous POAs”). These Previous POAs were in form and substance similar to this Power of Attorney, and no changes to the terms and conditions of the Previous POAs were made after their respective executions. This Power of Attorney shall, upon becoming effective, replace the Previous POAs.

LIU Dele

/s/ Liu Dele

Date: August 16, 2010

EX-10.11

Exhibit 10.11

AMENDED AND RESTATED

EXCLUSIVE TECHNICAL AND CONSULTING SERVICES

AGREEMENT

This Amended and Restated Exclusive Technical and Consulting Services Agreement (this “Agreement”) is entered in Beijing, People’s Republic of China (the “PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for purposes of this agreement) and dated August 16, 2010 by and between the following two parties:

(1) PARTY A: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD

Legal Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: Victor Wing Cheung Koo

(2) PARTY B: 1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.

Legal Address: Section A&C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: QIN Qiong

(Individually a “Party”, and collectively the “Parties”)

WHEREAS:

A. Party A, a wholly foreign-owned enterprise registered in the PRC under the laws of the PRC, owns resources to provide the technical and consulting services;

B. Party B, a domestic company registered in the PRC, is licensed by the relevant government authorities to engage in the business of Internet information services and value-added telecommunication services;

C. Party A agrees to be the provider of technical and consulting services to Party B, and Party B hereby agrees to accept such technical and consulting services.

THEREFORE, the Parties through friendly negotiation and based on the principle of equality and mutual benefit, enter into the Agreement as follows:

1. Technical and Consulting Services; Ownership and Exclusive Interests

1.1 During the term of this Agreement, Party A agrees to provide the relevant Technical and Consulting services to Party B (as specified in Appendix 1, the “Services”) in accordance with the Agreement.

1.2 Party B hereby agrees to accept Services. Party B further agrees that, during the term of this Agreement, it shall not utilize any third party to provide such Services for such above-mentioned business without the prior written consent of Party A.

Amended and Restated Exclusive Technical and Consulting Services Agreement -1-

1.3 Party A shall be the sole and exclusive owner of all rights, title, interests and intellectual property rights arising from the performance of this Agreement, including, (but not limited to, any copyrights, patent, know-how, commercial secrets and otherwise), whether developed by Party A or Party B based on Party A’s intellectual property.

1.4 Party B covenants that Party A have the priority on cooperation with Party B in the same condition in case Party B is going to cooperate with other enterprises in respect of any business.

2. Calculation and Payment of the Fee for Technical and Consulting Services (The “Fee”)

The Parties agree that the Fee under this Agreement shall be determined according to the Appendix 2.

3. Representations and Warranties

3.1 Party A hereby represents and warrants as follows:

3.1.1 Party A is a company duly registered and validly existing under the laws of the PRC;

3.1.2 Party A has full right, power, authority and capacity and all consents and approvals of any other third party and government necessary to execute and perform this Agreement, which shall not be against any enforceable and effective laws or contracts;

3.1.3 the Agreement will constitute a legal, valid and binding agreement of Party A enforceable against it in accordance with its terms upon its execution.

3.2 Party B hereby represents and warrants as follows:

3.2.1 Party B is a company duly registered and validly existing under the laws of the PRC and is licensed to engage in the business of Internet information services and value-added telecommunication services.

3.2.2 Party B has full right, power, authority and capacity and all consents and approvals of any other third party and government necessary to execute and perform this Agreement, which shall not be against any enforceable and effective laws or contracts.

Amended and Restated Exclusive Technical and Consulting Services Agreement -2-

3.2.3 Once the Agreement has been duly executed by the Parties, it will constitute a legal, valid and binding agreement of Party B enforceable against it in accordance with its terms upon its execution.

4. Confidentiality

4.1 Party B agrees to use all reasonable means to protect and maintain the confidentiality of Party A’s confidential data and information acknowledged or received by Party B by accepting the Services from Party A (collectively the “Confidential Information”). Party B shall not disclose or transfer any Confidential Information to any third party without Party A’s prior written consent. Upon termination or expiration of this Agreement, Party B shall, at Party A’s option, return all and any documents, information or software contained any of such Confidential Information to Party A or destroy it, delete all of such Confidential Information from any memory devices, and cease to use them. Party B shall take necessary measures to keep the Confidential Information to the employees, agents or professional consultants of Party B who are necessary to get to know such Information and procure them to observe the confidential obligations hereunder.

4.2 The limitation stipulated in Section 4.1 shall not apply to:

4.2.1 the materials available to the public at the time of disclosure;

4.2.2 the materials that become available to the public after the disclosure without fault of Party B;

4.2.3 the materials Party B prove to have got the control neither directly nor indirectly from any other party before the disclosure;

4.2.4 the information that each Party is required by law to disclose to relevant government authorities, stock exchange institute, or that is necessary to disclose the above confidential information directly to the legal counselor and financial consultant in order to keep its usual business.

4.3 Both Parties agree that this article shall survive the modification, elimination or termination of this Agreement.

5. Indemnity

In the event that a Party fails to comply with any of its obligations hereunder and such failure results in direct losses to the other Party, the defaulting Party shall make full and effective compensation to the other Party promptly upon receipt of a written notice from the non-defaulting Party. The compensation that the defaulting Party shall pay to the non-defaulting Party for its defaulting action shall be equivalent to the actual losses caused by its default, which shall not include special, consequential or punitive damages or compensation for lost profit. If the failure renders impossible the continued performance of this Agreement, the other Party shall have the right to terminate this Agreement.

Amended and Restated Exclusive Technical and Consulting Services Agreement -3-

6. Effective Date and Term

6.1 This Agreement shall be effective upon its being signed by the Parties hereunder. The term of this Agreement is ten (10) years, unless earlier terminated as set forth in this Agreement or in accordance with the terms set forth in the agreement entered into by both Parties separately.

6.2 This Agreement shall be automatically extended for another ten (10) years except Party A gives its written notice terminating this Agreement three (3) months before the expiration of this Agreement.

7. Termination

7.1 This Agreement shall expire on the date due unless this Agreement is extended as set forth in the relevant terms hereunder.

7.2 During the term of this Agreement, Party B is not permitted to terminate this Agreement early, except as provided in Section 5 above. Notwithstanding the foregoing, Party A may terminate this Agreement at any time with a written notice to Party B thirty (30) days before such termination. If Party A terminates the Agreement early for reasons attributable to Party B, Party B shall be obligated to compensate all the losses caused thereby to Party A and shall pay the relevant fees for the services provided.

7.3 Sections 4, 5 and 8 shall survive after the termination or expiration of this Agreement.

8. Settlement of Disputes

8.1 The Parties shall strive to settle any dispute arising from the interpretation or performance in connection with this Agreement through friendly consultation. In case no settlement can be reached through consultation, each Party can submit such matter to China International Economic and Trade Arbitration Commission (the “CIETAC”). The arbitration shall follow the then current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese and shall take place in Beijing. The arbitration award shall be final and binding upon both Parties. This article shall not be influenced by the termination or elimination of this Agreement.

Amended and Restated Exclusive Technical and Consulting Services Agreement -4-

8.2 Each Party shall continue to perform its obligations in good faith according to the provisions of this Agreement except for the matters in dispute.

9. Force Majeure

9.1 Force Majeure, which includes but is not limited to, acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning, war, means any event that is beyond the Party’s reasonable control and cannot be prevented with reasonable care. However, any shortage of credit, capital or finance shall not be regarded as an event of Force Majeure. The affected Party who is claiming to be not liable to its failure of fulfilling this Agreement by Force Majeure shall inform the other Party, without delay, of the approaches of the performance of this Agreement by the affected Party.

9.2 In the event that the affected Party is delayed in or prevented from performing its obligations under this Agreement by Force Majeure, only within the scope of such delay or prevention, the affected Party will not be responsible for any damage by reason of such a failure or delay of performance. The affected Party shall take appropriate means to minimize or remove the effects of Force Majeure and attempt to resume performance of the obligations delayed or prevented by the event of Force Majeure. After the event of Force Majeure is removed, both Parties agree to resume performance of this Agreement with their best efforts.

10. Notices

Notices or other communications required to be given by any Party pursuant to this Agreement shall be written in English and Chinese and shall be deemed to be duly given when it is delivered personally or sent by registered mail or postage prepaid mail or by a recognized courier service or by facsimile transmission to the address of the relevant Party or Parties set forth below.

PARTY A: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD
Address	:	Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
Fax			:	861059708818
Tele			:	861058851881
Addressee	:	Victor Wing Cheung Koo
PARTY B: 1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.
Address	:	Section A&C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
Fax			:	861059708818
Tele			:	861058851881

Amended and Restated Exclusive Technical and Consulting Services Agreement -5-

11. Assignment

Party B shall not assign its rights or obligations under this Agreement to any third party without the prior written consent of Party A. Party A may transfer its rights or obligations under this Agreement to any third party without the consent of Party B, but shall inform Party B of the above assignment.

12. Severability

Any provision of this Agreement that is invalid or unenforceable because of any inconsistency with relevant law shall be ineffective or unenforceable within such jurisdiction where the relevant law governs, without affecting in any way the remaining provisions hereof.

13. Amendment and Supplement

Any amendment and supplement of this Agreement shall come into force only after a written agreement is signed by both Parties. The amendment and supplement duly executed by both Parties shall be part of this Agreement and shall have the same legal effect as this Agreement.

This Agreement amends and restates the Exclusive Technical and Consulting Services Agreements entered into by the Parties before the date of this Agreement with respect to Party A’s provision of Services to Party B for service fees (“Previous Agreements”). In the event of any discrepancy between this Agreement and any Previous Agreement, this Agreement shall prevail to the extent of the discrepant provisions.

14. Governing Law

The execution, validity, performance and interpretation of this Agreement shall be governed by and construed in accordance with the laws of the PRC.

[The space below is intentionally left blank.]

Amended and Restated Exclusive Technical and Consulting Services Agreement -6-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

PARTY A: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo

PARTY B: 1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Qin Qiong
Authorized Representative: QIN QIONG

Amended and Restated Exclusive Technical and Consulting Services Agreement -7-

APPENDIX 1: THE LIST OF TECHNICAL AND CONSULTING SERVICES

Party A shall provide technical and consulting services as follows (to the extent permitted under applicable PRC laws and regulations):

1. maintenance of the machine room and website;

2. maintenance of office internal computers and networking equipment and, if requested by Party B, rental of such equipment as determined by Party A in its sole discretion;

3. inspection, installation and daily maintenance of servers;

4. integrated security services for the website;

5. design and implementation of the integrated structure of the network of the website, including the installation of the server system and 24 hours’ daily maintenances each week;

6. development and test of new products;

7. marketing plan of new products;

8. conception, creation, design, update and maintenance of the web pages;

9. maintenance of the client’s service platform;

10. training of management personnel and employees;

11. technical support services for finance, accounting, human resources and administration, including performing financial analysis, developing budgetary and forecasting techniques, and evaluating service providers and partners for purposes of achieving operational efficiency;

12. consulting services for operations, business development, sales and planning, market research, data collection and analysis;

13. collection of information on Party B’s competitors and providing Party B of all with information on relevant events related to competitors;

14. providing Party B with relevant updates regarding developments related to competitors’ businesses; and

15. public relations services.

Amended and Restated Exclusive Technical and Consulting Services Agreement -8-

APPENDIX 2: CALCULATION AND PAYMENT OF THE FEE FOR TECHNICAL AND CONSULTING SERVICES

During the term of this Agreement, the service fee payable by Party B to Party A for services rendered according to Appendix 1 shall be a fee in RMB determined by the following formula:

Service Fee Payable = Party B’s Revenue – Turnover Taxes – Party B’s Total Costs – Profit to be Retained by Party B;

Where:

• Party B’s Revenue is revenue received by Party B from third parties in the course of its ordinary business;

• Turnover Taxes include, but are not limited to, business tax, value-added tax, urban maintenance and construction tax and education surcharges;

• Party B’s Total Costs include all costs and expenses, such as costs of goods sold and operating costs incurred by Party B for carrying out the business; and

• Profit to be Retained by Party B shall be determined by a reputable certified public accountant designated by Party A.

During the term of this Agreement, Party A shall have the right to adjust the above Fees at its sole discretion without the consent of Party B.

Amended and Restated Exclusive Technical and Consulting Services Agreement -9-

EX-10.12

Exhibit 10.12

AMENDED AND RESTATED

EXCLUSIVE TECHNICAL AND CONSULTING SERVICES

AGREEMENT

This Amended and Restated Exclusive Technical and Consulting Services Agreement (this “Agreement”) is entered in Beijing, People’s Republic of China (the “PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for purposes of this agreement) and dated August 16, 2010 by and between the following two parties:

(1) PARTY A: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD

Legal Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: Victor Wing Cheung Koo

(2) PARTY B: JIAHEYI ADVERTISING (BEIJING) CO., LTD.

Legal Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: QIN Qiong

(Individually a “Party”, and collectively the “Parties”)

WHEREAS:

A. Party A, a wholly foreign-owned enterprise registered in the PRC under the laws of the PRC, owns resources to provide the technical and consulting services;

B. Party B, a domestic company registered in the PRC, is approved by the relevant government authorities to engage in the advertising agency and publishing businesses;

C. Party A agrees to be the provider of technical and consulting services to Party B, and Party B hereby agrees to accept such technical and consulting services.

THEREFORE, the Parties through friendly negotiation and based on the principle of equality and mutual benefit, enter into the Agreement as follows:

1. Technical and Consulting Services; Ownership and Exclusive Interests

1.1 During the term of this Agreement, Party A agrees to provide the relevant Technical and Consulting services to Party B (as specified in Appendix 1, the “Services”) in accordance with the Agreement.

1.2 Party B hereby agrees to accept Services. Party B further agrees that, during the term of this Agreement, it shall not utilize any third party to provide such Services for such above-mentioned business without the prior written consent of Party A.

Amended and Restated Exclusive Technical and Consulting Services Agreement -1-

1.3 Party A shall be the sole and exclusive owner of all rights, title, interests and intellectual property rights arising from the performance of this Agreement, including, (but not limited to, any copyrights, patent, know-how, commercial secrets and otherwise), whether developed by Party A or Party B based on Party A’s intellectual property.

1.4 Party B covenants that Party A have the priority on cooperation with Party B in the same condition in case Party B is going to cooperate with other enterprises in respect of any business.

2. Calculation and Payment of the Fee for Technical and Consulting Services (The “Fee”)

The Parties agree that the Fee under this Agreement shall be determined according to the Appendix 2.

3. Representations and Warranties

3.1 Party A hereby represents and warrants as follows:

3.1.1 Party A is a company duly registered and validly existing under the laws of the PRC;

3.1.2 Party A has full right, power, authority and capacity and all consents and approvals of any other third party and government necessary to execute and perform this Agreement, which shall not be against any enforceable and effective laws or contracts;

3.1.3 the Agreement will constitute a legal, valid and binding agreement of Party A enforceable against it in accordance with its terms upon its execution.

3.2 Party B hereby represents and warrants as follows:

3.2.1 Party B is a company duly registered and validly existing under the laws of the PRC and is qualified and approved to engage in the advertising agency and publishing businesses.

3.2.2 Party B has full right, power, authority and capacity and all consents and approvals of any other third party and government necessary to execute and perform this Agreement, which shall not be against any enforceable and effective laws or contracts.

3.2.3 Once the Agreement has been duly executed by the Parties, it will constitute a legal, valid and binding agreement of Party B enforceable against it in accordance with its terms upon its execution.

Amended and Restated Exclusive Technical and Consulting Services Agreement -2-

4. Confidentiality

4.1 Party B agrees to use all reasonable means to protect and maintain the confidentiality of Party A’s confidential data and information acknowledged or received by Party B by accepting the Services from Party A (collectively the “Confidential Information”). Party B shall not disclose or transfer any Confidential Information to any third party without Party A’s prior written consent. Upon termination or expiration of this Agreement, Party B shall, at Party A’s option, return all and any documents, information or software contained any of such Confidential Information to Party A or destroy it, delete all of such Confidential Information from any memory devices, and cease to use them. Party B shall take necessary measures to keep the Confidential Information to the employees, agents or professional consultants of Party B who are necessary to get to know such Information and procure them to observe the confidential obligations hereunder.

4.2 The limitation stipulated in Section 4.1 shall not apply to:

4.2.1 the materials available to the public at the time of disclosure;

4.2.2 the materials that become available to the public after the disclosure without fault of Party B;

4.2.3 the materials Party B prove to have got the control neither directly nor indirectly from any other party before the disclosure;

4.2.4 the information that each Party is required by law to disclose to relevant government authorities, stock exchange institute, or that is necessary to disclose the above confidential information directly to the legal counselor and financial consultant in order to keep its usual business.

4.3 Both Parties agree that this article shall survive the modification, elimination or termination of this Agreement.

5. Indemnity

In the event that a Party fails to comply with any of its obligations hereunder and such failure results in direct losses to the other Party, the defaulting Party shall make full and effective compensation to the other Party promptly upon receipt of a written notice from the non-defaulting Party. The compensation that the defaulting Party shall pay to the non-defaulting Party for its defaulting action shall be equivalent to the actual losses caused by its default, which shall not include special, consequential or punitive damages or compensation for lost profit. If the failure renders impossible the continued performance of this Agreement, the other Party shall have the right to terminate this Agreement.

Amended and Restated Exclusive Technical and Consulting Services Agreement -3-

6. Effective Date and Term

6.1 This Agreement shall be effective upon its being signed by the Parties hereunder. The term of this Agreement is ten (10) years, unless earlier terminated as set forth in this Agreement or in accordance with the terms set forth in the agreement entered into by both Parties separately.

6.2 This Agreement shall be automatically extended for another ten (10) years except Party A gives its written notice terminating this Agreement three (3) months before the expiration of this Agreement.

7. Termination

7.1 This Agreement shall expire on the date due unless this Agreement is extended as set forth in the relevant terms hereunder.

7.2 During the term of this Agreement, Party B is not permitted to terminate this Agreement early. Notwithstanding the foregoing, Party A may terminate this Agreement at any time with a written notice to Party B thirty (30) days before such termination. If Party A terminates the Agreement early for reasons attributable to Party B, Party B shall be obligated to compensate all the losses caused thereby to Party A and shall pay the relevant fees for the services provided.

7.3 Sections 4 and 5 shall survive after the termination or expiration of this Agreement.

8. Settlement of Disputes

8.1 The Parties shall strive to settle any dispute arising from the interpretation or performance in connection with this Agreement through friendly consultation. In case no settlement can be reached through consultation, each Party can submit such matter to China International Economic and Trade Arbitration Commission (the “CIETAC”). The arbitration shall follow the then current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese and shall take place in Beijing. The arbitration award shall be final and binding upon both Parties. This article shall not be influenced by the termination or elimination of this Agreement.

8.2 Each Party shall continue to perform its obligations in good faith according to the provisions of this Agreement except for the matters in dispute.

Amended and Restated Exclusive Technical and Consulting Services Agreement -4-

9. Force Majeure

9.1 Force Majeure, which includes but is not limited to, acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning, war, means any event that is beyond the Party’s reasonable control and cannot be prevented with reasonable care. However, any shortage of credit, capital or finance shall not be regarded as an event of Force Majeure. The affected Party who is claiming to be not liable to its failure of fulfilling this Agreement by Force Majeure shall inform the other Party, without delay, of the approaches of the performance of this Agreement by the affected Party.

9.2 In the event that the affected Party is delayed in or prevented from performing its obligations under this Agreement by Force Majeure, only within the scope of such delay or prevention, the affected Party will not be responsible for any damage by reason of such a failure or delay of performance. The affected Party shall take appropriate means to minimize or remove the effects of Force Majeure and attempt to resume performance of the obligations delayed or prevented by the event of Force Majeure. After the event of Force Majeure is removed, both Parties agree to resume performance of this Agreement with their best efforts.

10. Notices

Notices or other communications required to be given by any Party pursuant to this Agreement shall be written in English and Chinese and shall be deemed to be duly given when it is delivered personally or sent by registered mail or postage prepaid mail or by a recognized courier service or by facsimile transmission to the address of the relevant Party or Parties set forth below.

PARTY A: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD
Address	:	Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
Fax			:	861059708818
Tele			:	861058851881
Addressee	:	Victor Wing Cheung Koo
PARTY B: JIAHEYI ADVERTISING (BEIJING) CO., LTD.
Address	:	Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
Fax			:	861059708818
Tele			:	861058851881

Amended and Restated Exclusive Technical and Consulting Services Agreement - 5 - -

11. Assignment

Party B shall not assign its rights or obligations under this Agreement to any third party without the prior written consent of Party A. Party A may transfer its rights or obligations under this Agreement to any third party without the consent of Party B, but shall inform Party B of the above assignment.

12. Severability

Any provision of this Agreement that is invalid or unenforceable because of any inconsistency with relevant law shall be ineffective or unenforceable within such jurisdiction where the relevant law governs, without affecting in any way the remaining provisions hereof.

13. Amendment and Supplement

Any amendment and supplement of this Agreement shall come into force only after a written agreement is signed by both Parties. The amendment and supplement duly executed by both Parties shall be part of this Agreement and shall have the same legal effect as this Agreement.

This Agreement amends and restates the Exclusive Technical and Consulting Services Agreements entered into by the Parties before the date of this Agreement with respect to Party A’s provision of Services to Party B for service fees (“Previous Agreements”). In the event of any discrepancy between this Agreement and any Previous Agreement, this Agreement shall prevail to the extent of the discrepant provisions.

14. Governing Law

The execution, validity, performance and interpretation of this Agreement shall be governed by and construed in accordance with the laws of the PRC.

15. Languages and Counterparts

This Agreement is executed in Two (2) originals in English and each Party shall retain 1 original.

[The space below is intentionally left blank.]

Amended and Restated Exclusive Technical and Consulting Services Agreement -6-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

PARTY A: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo

PARTY B: JIAHEYI ADVERTISING (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Qin Qiong
Authorized Representative: QIN QIONG

Amended and Restated Exclusive Technical and Consulting Services Agreement -7-

APPENDIX 1: THE LIST OF TECHNICAL AND CONSULTING SERVICES

Party A shall provide technical and consulting services as follows (to the extent permitted under applicable PRC laws and regulations):

1. maintenance of office internal computers and networking equipment and, if requested by Party B, rental of such equipment as determined by Party A in its sole discretion;

2. design and implementation of the integrated structure of the network of online advertisements;

3. development and test of new online advertisement products;

4. marketing plan of new online advertisement products;

5. conception, creation, design, update and maintenance of the web pages-based advertising products;

6. maintenance of the client’s online advertisements system;

7. training of management personnel and employees;

8. technical support services for finance, accounting, human resources and administration, including performing online advertising technology-related financial analysis, developing budgetary and forecasting techniques, and evaluating service providers and partners for purposes of achieving operational efficiency;

9. consulting services for advertising-related operations, business development, sales and planning, market research, data collection and analysis;

10. collection of information on Party B’s competitors and providing Party B of all with information on relevant events related to competitors;

11. providing Party B with relevant updates regarding developments related to competitors’ businesses;

12. public relations services

Amended and Restated Exclusive Technical and Consulting Services Agreement -8-

APPENDIX 2: CALCULATION AND PAYMENT OF THE FEE FOR TECHNICAL AND CONSULTING SERVICES

During the term of this Agreement, the service fee payable by Party B to Party A for services rendered according to Appendix 1 shall be a fee in RMB determined by the following formula:

Service Fee Payable = Party B’s Revenue – Turnover Taxes – Party B’s Total Costs – Profit to be Retained by Party B;

Where:

• Party B’s Revenue is revenue received by Party B from third parties in the course of its ordinary business;

• Turnover Taxes include, but are not limited to, business tax, value-added tax, urban maintenance and construction tax and education surcharges;

• Party B’s Total Costs include all costs and expenses, such as costs of goods sold and operating costs incurred by Party B for carrying out the business; and

• Profit to be Retained by Party B shall be determined by a reputable certified public accountant designated by Party A.

During the term of this Agreement, Party A shall have the right to adjust the above Fees at its sole discretion without the consent of Party B.

Amended and Restated Exclusive Technical and Consulting Services Agreement -9-

EX-10.13

Exhibit 10.13

AMENDED AND RESTATED

TRADEMARK LICENSE AGREEMENT

This Amended and Restated Trademark License Agreement (the “Agreement”) entered in Beijing the People’s Republic of China (the “PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for the purposes of this Agreement), dated August 16, 2010, by and between

(1) The Licensor: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD

Legal Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: Victor Wing Cheung Koo

and

(2) The Licensee: 1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.

Legal Address: Section A &C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: QIN Qiong

WHEREAS:

A. The Licensor, a wholly foreign-owned enterprise registered in Beijing under the laws of the PRC, is the exclusive owner of the trademarks listed in the Exhibit 1 of this Agreement (the “Trademarks”);

B. The Licensee, a limited liability company registered in Beijing under the laws of the PRC, is licensed to engage in the business of providing Internet content and related services;

C. The Licensor agrees to license the Trademarks to the Licensee in accordance with the terms and conditions set forth herein and the Licensee agrees to accept the license on the terms and conditions set forth herein;

NOW THEREFORE, on the basis of mutual benefit and friendly negotiation, the parties agree as follows:

1A. EFFECTIVE DATE

This Agreement shall be effective from August 16, 2010 (“Effective Date”).

1. Grant of License

1.1 The Trademarks

Under the terms and conditions hereinafter set forth, the Licensor hereby grants to the Licensee and the Licensee accepts from the Licensor, a non-exclusive and nontransferable license, without sublicense rights, to use parts of or all of the Trademarks listed in Exhibit 1, in the Licensee’s operations in the PRC.

Amended and Restated
Trademark License Agreement	-1-

1.2 Scope

1.2.1 The use of the Trademarks granted by the Licensor to the Licensee extends to Licensee’s own business operations. The Licensee agrees that it will not make, or authorize, any direct or indirect use of the Trademarks other than for its own business, unless otherwise stipulated in this agreement. The Licensee agrees that it will not directly or indirectly sublicense the Trademarks to any others without Licensor’s prior written approval.

1.2.2 The License in this Agreement is effective in the PRC and other territories where the Licensor may grant the Licensee in writing from time to time(“Licensed Territory”). The Licensee agrees that it will not make, or authorize, any direct or indirect use of the Trademarks in any regions other than the Licensed Territory.

1.3 Licensee’s confirmation

The Licensee confirms that it does not have any rights, titles or interests of the Trademarks except the rights, titles and interests provided for under this Agreement.

1.4 Prohibitions

Licensee undertakes that, at any time either during or after the Term, it shall not:

1.4.1 commit any act which affects the rights of Licensor in relation to any of the Trademarks; or

1.4.2 apply for the registration of any of the Trademarks or any similar trademark in any country or region in the world.

2. Payment

The Licensee agrees to pay to the Licensor license fees determined in accordance with the calculation method and the form of payment are set forth in Exhibit 2.

Amended and Restated
Trademark License Agreement	-2-

3. Goodwill

The Licensee recognizes the value of the goodwill associated with the Trademarks and the relevant rights, and acknowledges that the Trademarks and goodwill (including but not limited to the goodwill deriving from the Licensee’s use) pertaining thereto shall be the sole and exclusive property of the Licensor.

4. Confidentiality

4.1 The Licensee shall protect and maintain the confidentiality of any and all confidential data and information acknowledged or received by the Licensee by accepting licensing of the Trademarks from the Licensor (collectively the “Confidential Information”). Upon termination or expiration of this Agreement, the Licensee shall, at the Licensor’s option, return all and any documents, information or software contained any of such Confidential Information to the Licensor or destroy it and delete such Confidential Information from any electronic devices. The Licensee shall not disclose, grant or transfer any Confidential Information to any third party and will not use the Confidential Information without the Licensor’s written consent. Licensee shall disclose the Confidential Information to the necessary employees, agents or consultants using measures reasonably calculated to ensure the security of the Confidential Information , and shall urge the necessary employees, agents or consultants to observe the obligations under this Agreement.

4.2 The above limitations shall not apply to the situations as follows:

4.2.1 The Confidential Information has become available to the public and such availability was not due to the Licensee’s disclosure of it;

4.2.2 The Licensee acquired the Confidential Information directly or indirectly from other sources before receiving it from the Licensor;

4.2.3 Where the Confidential Information is required by law to be disclosed, or, based on general operational needs, should be disclosed to legal or financial advisors.

4.3 This Article 4 shall survive the termination, rescinding or modification of this agreement.

4.4 With the consent of both parties, Article 4 shall survive any amendment, expiration or termination of this Agreement.

Amended and Restated
Trademark License Agreement	-3-

5. Representations and Warranties

5.1 The Licensor represents and warrants as follows:

5.1.1 the Licensor is a company duly registered and in good standing under the applicable laws of the PRC;

5.1.2 the Licensor, subject to its business scope, has full right, power, authority and capacity and all necessary consents and approvals of any third party and government authorities to execute and perform this Agreement, which shall not be against any enforceable and effective laws or contracts;

5.1.3 upon its execution, this Agreement will constitute a legal, valid and binding agreement of the Licensor and will be enforceable against the Licensor in accordance with its terms;

5.1.4 the Licensor is the exclusive owner of the Trademarks

5.2 The Licensee represents and warrants as follows:

5.2.1 the Licensee is a company duly registered and in good standing under the applicable laws of the PRC, and is approved by the relevant authorities to provide the internet information services and the value-added telecom service;

5.2.2 the Licensee, subject to its business scope, has full right, power, authority and capacity and all necessary consents and approvals of any third party and government authorities to execute and perform this Agreement, which shall not be against any enforceable and effective laws or contracts;

5.2.3 the Licensee will not use or authorize to use any trademarks or symbols, which the Licensor judges by itself, are similar to the Trademarks and to make confusion.

5.2.4 the Agreement will constitute a legal, valid and binding agreement of the Licensee and will be enforceable against the Licensee in accordance with its terms upon its execution.

6. The Licensee further represents and warrants as follows

6.1 The Licensee agrees that it will not, during the term of this Agreement, or thereafter, attack the rights of Licensing or any rights of the Licensor in and to the Trademarks or attack the validity of this Agreement, or otherwise take or fail to take any action that impairs such rights or license.

Amended and Restated
Trademark License Agreement	-4-

6.2 The Licensee agrees to assist the Licensor to the extent necessary in the procurement of any protection or to protect any of the Licensor’s rights to the Trademarks. In the event any third party lodges a claim concerning the Trademarks, the Licensor, if it so desires, may commence or prosecute any claims or lawsuits in its own name or in the name of the Licensee or join the Licensee as a party thereto. In the event any third party infringes on the above mention Trademarks, the Licensee shall notify the Licensor in writing of any infringements, or imitation by others of the Trademarks which may come to the Licensee’s attention, and the Licensor shall have the sole right to determine whether or not any action shall be taken on account of any such infringements.

6.3 The Licensee further agrees to use the Trademarks only in accordance with this Agreement and shall not use the Trademarks in any way that, in the opinion of the Licensor, is deceptive, misleading or in any way damaging to such Trademarks or the reputation of the Licensor.

7. Quality

The Licensee shall use its best efforts to ensure that its operations protect and enhance the reputation of the Trademarks.

8. Promotion Material

In all cases where the Licensee makes promotion material involving the Trademarks, the production costs of such material thereof shall be borne by the Licensee. All copyrights or other intellectual property rights of such material concerning the Trademarks thereto shall be the sole and exclusive property of the Licensor whether developed by the Licensor or the Licensee.

The Licensee agrees not to advertise or publicize any of the Trademarks on radio, television, papers, magazines, the Internet without the prior written consent of the Licensor.

9. Effective Date and Term

9.1 This Agreement has been duly executed when it is duly signed by an authorized representative of each party and shall be effective as of the Effective Date. The term of this Agreement is 10 (ten) years unless earlier terminated as set forth in this Agreement.

9.2 Unless any other provisions set forth in written form, this Agreement shall be applicable to any other trademarks licensed to the Licensee within the term of this Agreement. After the execution of this Agreement, the Licensor and Licensee shall review this Agreement every 3 months to determine whether to make any amendment or supplement to this Agreement.

Amended and Restated
Trademark License Agreement	-5-

9.3 This Agreement shall be extended for 10 (ten) years upon agreement of both parties.

10. Record Filing

Within 3(three) months upon the execution of this agreement, both parties shall, in compliance with the law of China, make a record filing of the copy of the Agreement to the Trademark Office. Both parties agree to execute or furnish the relevant documents required in line with the principal hereof and relevant laws.

11. Termination

11.1 This Agreement shall expire on the date due or the date when the Licensor’s right of ownership terminates unless this Agreement is extended as set forth above.

11.2 Without prejudice to any legal or other rights or remedies of the party that requests for termination of this Agreement, any party has the right to terminate this Agreement immediately with written notice to the other party in the event the other party materially breaches this Agreement including without limitation to Sections 6.1, 6.2 and 6.3 of this Agreement and fails to cure its breach within 30 days from the date it receives written notice of its breach from the non-breaching party.

11.3 During the term of this Agreement, the Licensor may terminate this Agreement at any time with a written notice to the Licensee 30 days before such termination. The Licensee shall not terminate this Agreement in prior.

11.4 Article 3, 4, 6, 15 and 16 shall survive after the termination or expiration of this Agreement.

12. Force Majeure

12.1 Force Majeure means any event that is beyond the party’s reasonable control and cannot be prevented with reasonable care including but not limited to the acts of governments, nature, fire, explosion, typhoon, flood, earthquake, tide, lightning and war. However, any shortage of credit, capital or finance shall not be regarded as an event of Force Majeure. The party affected by Force Majeure shall notify the other party without delay.

Amended and Restated
Trademark License Agreement	-6-

12.2 In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by Force Majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate measures to minimize or remove the effects of Force Majeure and attempt to resume performance of the obligations delayed or prevented by the event of Force Majeure, and the affected party will not be responsible to such performance and will only be responsible to the delayed parts of performance. After the event of Force Majeure is removed, both parties agree to resume the performance of this Agreement with their best efforts.

13. Notices

Notice or other communications required to be given by any party pursuant to this Agreement shall be written in English and Chinese and shall be deemed to be duly given when it is delivered personally or sent by registered mail or postage prepaid mail or by a recognized courier service or by facsimile transmission to the address set forth below.

The Licensor	:	1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.
Address	:	Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	Victor Koo
The Licensee	:	1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.
Address	:	Section A&C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	QIN Qiong

14. Re-Transfer, Re-License

This agreement and all the rights and duties hereunder are personal to the Licensee. The Licensee agrees that it will not assign, lease or pledge to any third party without the written consent of the Licensor.

Amended and Restated
Trademark License Agreement	-7-

15. Settlement Of Disputes

15.1 The parties shall strive to settle any disputes arising from the interpretation or performance of this Agreement through negotiations in good faith. In the event that no settlement can be reached through negotiation within 30 days after one party issues a negotiating notice, either party may submit such matter to China International Economic and Trade Arbitration Commission (the “CIETAC”). The arbitration shall follow the current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese and shall take place in Beijing. The arbitration award shall be final and binding upon the parties and shall be enforceable in accordance with its terms.

15.2 Except for the issue under dispute, all parties shall perform their own duties under the Agreement in good faith.

16. Applicable Law

The execution, validity, performance, interpretation and any disputes in respect of this Agreement shall be governed and construed by the laws of the PRC.

17. Amendment And Supplement

Any amendment and supplement of this Agreement shall come into force only after a written agreement is signed by both parties. The amendment and supplement duly executed by both parties shall be part of this Agreement and shall have the same legal effect as this Agreement.

This Agreement amends and restates the Trademark License Agreements entered into by the Parties in March 2006 and November 2007, respectively (“Previous Agreements”). In the event of any discrepancy between this Agreement and any Previous Agreement, this Agreement shall prevail to the extent of the discrepant provisions.

18. Entire Agreement

This Agreement and all the agreements and/or documents referenced or specifically included herein constitute the entire agreement among the parties in respect of the subject matter hereof and supersede all prior oral or written agreements, contract, understanding and correspondence among them.

19. Severability

Any provision of this Agreement that is invalid or unenforceable due to the violation of relevant laws in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability, without affecting in any way the remaining provisions hereof.

Amended and Restated
Trademark License Agreement	-8-

20. Waiver

Any waiver of any rights, powers, or privileges under this Agreement shall not be deemed as a waiver of those rights, powers or privileges hereunder in the future or any other rights, powers or privileges hereunder then or in the future. Any whole or partial performance of any rights, powers, or privileges hereunder shall not exclude the performance of any other rights, power, or privileges hereunder.

21. Exhibits

The Exhibits referred to in this Agreement are an integral part of this Agreement and have the same legal effect as this Agreement.

[The space below is intentionally left blank.]

Amended and Restated
Trademark License Agreement	-9-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

The Licensor: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo

The Licensee: 1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Qin Qiong
Authorized Representative: QIN Qiong

Amended and Restated
Trademark License Agreement	-10-

EXHIBIT 1

LIST OF LICENSED TRADEMARKS

1		41		5236725
2		41		5801740
3		41		5939386
4		36		6886294
5		34		6886295
6		21		6886296
7		20		6886297
8		15		6886298
9		12		6886300

Amended and Restated
Trademark License Agreement	-11-

EXHIBIT 2

CALCULATION METHOD AND FORM OF PAYMENT OF LICENSE FEE

The license fee under this Agreement shall be 5% of the total revenue of the Licensee. The license fee shall be paid every quarter within 15 days after the end of the quarter. If the Licensor considers it is helpful to the business of Licensee, the Licensor may reduce or exempt from payment any whole or part of the license fee.

Amended and Restated
Trademark License Agreement	-12-

EX-10.14

Exhibit 10.14

AMENDED AND RESTATED

DOMAIN NAME LICENSE AGREEMENT

This Amended and Restated Domain Name License Agreement (this “Agreement”) is entered in Beijing, the People’s Republic of China (the “PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for the purposes of this Agreement), dated August 16, 2010, by and between

(1) The Licensor: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD

Legal Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: Victor Wing Cheung Koo

and

(2) The Licensee: 1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.

Legal Address: Section A&C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: QIN Qiong

WHEREAS:

A. The Licensor, a wholly foreign-owned enterprise registered in Beijing under the laws of the PRC, owns the domain names listed in Exhibit 1 of this Agreement (the “Domain Names”);

B. The Licensee, a limited liability company registered in Beijing under the laws of the PRC, is licensed to engage in the business of providing internet content and related services;

C. The Licensor agrees to license the Domain Names to the Licensee in accordance with the terms and conditions set forth herein and the Licensee agrees to accept the license on the terms and conditions set forth herein;

NOW THEREFORE, on the basis of mutual benefit and friendly negotiation, the parties agree as follows:

1A. Effective Date

This Agreement shall be effective from August 16, 2010 (“Effective Date”).

1. Grant of License

1.1 The Domain Names

Under the terms and conditions hereinafter set forth, the Licensor hereby grants to the Licensee and the Licensee accepts from the Licensor a non-exclusive and nontransferable license, without sublicense rights, to use part of or all of the Domain Names listed in Exhibit 1 in the Licensee’s business operations in the PRC.

Amended and Restated
Domain Name License Agreement	-1-

1.2 Scope

1.2.1 The use of the Domain Names granted by the Licensor to the Licensee extends to Licensee’s own business operations. The Licensee agrees that it will not make, or authorize, any direct or indirect use of the Domain Names other than for its own business, unless otherwise stipulated in this agreement. The Licensee agrees that it will not directly or indirectly sublicense the Domain Names to any others without Licensor’s prior written approval.

1.2.2 The License in this Agreement is effective in the PRC. Licensee agrees that it will not make, or authorize, any direct or indirect use of the Domain Names in any other regions.

1.3 Licensee’s confirmation

The Licensee confirms that the Licensee does not have any right, title or interest in the domain names except the rights, title and interest provided for under this Agreement.

2. Payment

The Licensee agrees to pay the Licensor license fees determined in accordance with the calculation method and the method of payment provided in Exhibit 2 of this Agreement.

3. Goodwill

The Licensee recognizes the value of the goodwill associated with the Domain Names and the relevant rights, and acknowledges that the Domain Names and goodwill pertaining thereto (including but not limited to the goodwill deriving from the Licensee’s use) shall be the sole and exclusive property of the Licensor.

4. Confidentiality

4.1 By accepting the granting of the Domain Name licenses from the Licensor, the Licensee agrees to protect and maintain the confidentiality of any and all confidential data and information that it acknowledged or received (collectively the “Confidential Information”). Upon termination or expiration of this Agreement, the Licensee shall, at the Licensor’s request, return any and all documents, information or software containing such Confidential Information to the Licensor or destroy and delete such Confidential Information from any electronic devices. The Licensee shall not disclose, grant or transfer any Confidential Information to any third party and will not use the Confidential Information without the Licensor’s written consent.

Amended and Restated
Domain Name License Agreement	-2-

Licensee shall disclose the Confidential Information only to the necessary employees, agents or consultants using measures reasonably calculated to ensure the security of the Confidential Information, and shall urge the necessary employees, agents or consultants to observe the obligations under this Agreement.

4.2 The above limitations shall not apply where:

4.2.1 The Confidential Information has become available to the public and such availability was not due to the Licensee’s disclosure of it;

4.2.2 The Licensee acquired the Confidential Information directly or indirectly from other sources before receiving it from the Licensor;

4.2.3 Where the Confidential Information is required by law to be disclosed, or, based on general operational needs, should be disclosed to legal or financial advisors.

4.3 This Article 4 shall survive the termination, rescinding or modification of this agreement.

5. Representations and Warranties

5.1 The Licensor represents and warrants as follows:

5.1.1 the Licensor is a company duly registered and in good standing under the applicable laws of the PRC;

5.1.2 the Licensor, within its business scope, has full corporate power and authority and has taken all corporate actions and has obtained all necessary approvals and authorizations from third parties and government authorities to execute and perform theist obligations under this Agreement, which will not constitute or result in a violation of any enforceable and effective agreements;

5.1.3 upon its execution, this Agreement will constitute a legal, valid and binding agreement of the Licensor and will be enforceable against the Licensor in accordance with its terms;

Amended and Restated
Domain Name License Agreement	-3-

5.1.4 the Licensor is the exclusive owner of the Domain Names.

5.2 The Licensee represents and warrants as follows:

5.2.1 the Licensee is a company duly registered and in good standing under the applicable laws of the PRC, and is approved by the relevant authorities to engage in the business of providing internet content and related services;

5.2.2 the Licensee, within its business scope, has full corporate, power and authority and has taken all corporate actions and has obtained all necessary approvals and authorizations from third parties and government authorities to execute and perform the obligations under this Agreement, which will not constitute or result in a violation of any enforceable and effective agreements;

5.2.3 the Licensee will make any and all filings or subscriptions relating to the Domain Names that it is requested to make by the Licensor.

6. The Licensee Further Represents and Warrants as Follows

6.1 The Licensee agrees that it will not, during the term of this Agreement, or thereafter, challenge the title or any rights of the Licensor in and to the Domain Names or challenge the validity of this Agreement, and shall not perform or fail to perform any act, which may impair the Licensor’s interest in the above rights or the license.

6.2 The Licensee agrees to assist the Licensor to the extent necessary in the procurement of any protection or to protect any of the Licensor’s rights to the Domain Names, and the Licensor, if it so desires, may commence or prosecute any claims or lawsuits in its own name or in the name of the Licensee or join the Licensee as a party thereto. The Licensee shall notify the Licensor in writing of any infringements of the Domain Names that may come to the Licensee’s attention, and the Licensor shall have the sole right to determine whether or not any action shall be taken on account of any such infringements.

6.3 The Licensee further agrees to use the Domain Names only in accordance with this Agreement and shall not use the Domain Names in any way that, in the opinion of the Licensor, is deceptive, misleading or in any way damaging to such Domain Names or the reputation of the Licensor.

7. Quality

The Licensee shall make its best efforts to ensure that its operations protect the goodwill represented by the said domain name.

Amended and Restated
Domain Name License Agreement	-4-

8. Promotion

In all cases where the Licensee produces promotional material involving the Domain Names, the production costs of such material shall be borne by the Licensee. All copyrights or other intellectual property rights of such material concerning the Domain Names thereto shall be the sole and exclusive property of the Licensor whether developed by the Licensor or the Licensee.

The Licensee agrees that the Licensee shall not promote or advertise the Domain Names in any newspapers, TV, magazine, radio, internet or any other media without the prior written consent of the Licensor.

9. Effective Date and Term

9.1 This Agreement is executed by an authorized representative by each party as of the date first written above and is effective as of Effective Date. The term of this Agreement is 10 (ten) years unless earlier terminated as set forth in this Agreement.

9.2 Unless otherwise agreed upon by the parties in writing, this Agreement shall be applicable to any other domain names licensed to the Licensee within the term of this Agreement. After the execution of this Agreement, the Licensor and Licensee shall review this Agreement every 3 months to determine whether to modify or renew this Agreement.

9.3 This Agreement will be extended for a terms of 10 (ten) years upon the agreement of both parties.

10. Termination

10.1 This Agreement shall expire (a) upon the expiration of its term as specified under Section 9 above, unless this Agreement is extended as set forth above, or (b) when the Licensor is no longer the exclusive owner of the Domain Names.

10.2 Without prejudice to any legal or other rights or remedies of the party that requests termination of this Agreement, any party has the right to terminate this Agreement immediately with written notice to the other party in the event the other party materially breaches this Agreement including but not limited to the provisions in Section 6.1, 6.2 and 6.3 of this Agreement and fails to cure its breach within 30 days from the date it receives written notice of its breach from the non-breaching party.

10.3 During the term of this Agreement, the Licensor may terminate this Agreement at any time with a written notice to the Licensee 30 days before such termination. The Licensee may not terminate this Agreement.

Amended and Restated
Domain Name License Agreement	-5-

10.4 Article 3, 4, 6, 14 and 15 shall survive after the termination or expiration of this Agreement.

11. Force Majeure

11.1 Force Majeure means any event that is beyond a party’s reasonable control and cannot be prevented with reasonable care, including but not limited to the acts of government, nature, fire, explosion, typhoon, flood, earthquake, tide, lightning and war. However, any shortage of credit, capital or finance shall not be regarded as an event of Force Majeure. The party affected by Force Majeure shall notify the other party without delay.

11.2 In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by Force Majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate measures to minimize or remove the effects of Force Majeure and attempt to resume performance of the obligations delayed or prevented by the event of Force Majeure, and the affected party will not be responsible to such performance and will only be responsible for the delayed aspects of performance. After the event of Force Majeure is removed, both parties agree to resume the performance of this Agreement with their best efforts.

12. Notices

Notice or other communications required to be given by any party pursuant to this Agreement shall be written in English and Chinese and shall be deemed to be duly given when delivered personally or sent by registered mail or postage prepaid mail or by a recognized courier service or by facsimile transmission to the address set forth below.

The Licensor	:	1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.
Address	:	Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	Victor Koo

Amended and Restated
Domain Name License Agreement	-6-

The Licensee	:	1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.
Address	:	Section A &C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing,  China
Fax	:	861059708818
Tele	:	861058851881
Addressee	:	QIN Qiong

13. Re-Transfer, Re-License

Without the consent of the Licensor, the rights and obligation licensed under this Agreement shall not be transferred, leased, or mortgaged to any third party.

14. Dispute Resolution

14.1 The parties shall strive to settle any disputes arising from interpretation or performance of this Agreement through negotiations in good faith. In the event that no settlement can be reached through negotiations within 30 days after one party issues a negotiating notice, either party may submit such matter to the China International Economic and Trade Arbitration Commission (the “CIETAC”). The arbitration shall follow the current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese and shall take place in Beijing. The arbitration award shall be final and binding upon the parties and shall be enforceable in accordance with its terms.

14.2 Except for the issues under dispute, all parties shall perform their own duties pursuant to the provisions herein in good faith.

15. Applicable Law

The subscription, validity, interpretation, implementation and any disputes in respect of this Agreement shall be governed by the laws of the PRC.

16. Amendment and Supplement

This Agreement shall not be amended, supplemented or modified except by a written instrument signed by both parties. The amendment or supplement duly executed by both parties shall constitute part of this Agreement and shall have the same legal effect as this Agreement.

This Agreement amends and restates the Domain Name License Agreements entered into by the Parties in March 2006 and November 2007, respectively (“Previous Agreements”). In the event of any discrepancy between this Agreement and any Previous Agreement, this Agreement shall prevail to the extent of the discrepant provisions.

Amended and Restated
Domain Name License Agreement	-7-

17. Severability

Any provision of this Agreement that is invalid or unenforceable due to the violation of relevant laws in any jurisdiction shall, as to that jurisdiction, be ineffective or void of binding force only to the extent of such invalidity or unenforceability, without affecting in any way the remaining provisions hereof.

18. Waiver

Any waiver of any rights, powers, or privileges under this Agreement shall not be deemed as a waiver of those rights, powers or privileges hereunder in the future or any other rights, powers or privileges hereunder then or in the future. Any whole or partial performance of any rights, powers, or privileges hereunder shall not exclude the performance of any other rights, power, or privileges hereunder.

19. Exhibits

The Exhibits referred to in this Agreement are an integral part of this Agreement and have the same legal effect as this Agreement.

[The space below is intentionally left blank.]

Amended and Restated
Domain Name License Agreement	-8-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

The Licensor: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo

The Licensee: 1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Qin Qiong
Authorized Representative: QIN Qiong

Amended and Restated
Domain Name License Agreement	-9-

EXHIBIT 1

LIST OF LICENSED DOMAIN NAMES

i ..net

i

soku.hk

u ..com

ykimg.com

yoku.net.cn

yoqoo.cn

yoqoo.com

yoqoo.com.cn

yoqoo.net

yoqoo.net.cn

yoqoounion.com

youku.biz

youku.com.cn

youku.org

youkuunion.com

youqoo.net

..hk

youkoo.com, soku.com.cn

Amended and Restated
Domain Name License Agreement	-10-

EXHIBIT 2

CALCULATION METHOD AND PAYMENT METHOD OF THE LICENSE FEE

The license fee under this Agreement shall be 5% of the total revenue of the Licensee. The license fee shall be paid every quarter within 15 days after the end of the quarter. If the Licensor considers it is helpful to the business of Licensee, the Licensor may reduce or exempt from payment any whole or part of the license fee.

Amended and Restated
Domain Name License Agreement	-11-

EX-10.15

Exhibit 10.15

AMENDED AND RESTATED

EQUITY OPTION AGREEMENT

This Amended and Restated Equity Option Agreement (this “Agreement”) is entered in Beijing, the People’s Republic of China (“PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for the purposes of this Agreement) and dated August 16, 2010, by and among the following parties:

(1) 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD. (“1Verge Internet”)

(2) QIN Qiong, a PRC citizen whose PRC identification number is 310108197109214485, and whose residential address is Room 1602, Tower 3, Palm Tree International Apartment, 8 South Chaoyang Park Road, Beijing 100026, PRC

(3) LIU Dele, a PRC citizen whose PRC identification number is 310101196805284437 and whose residential address is, 1701 Tower D, Sunz Garden, 98 Jianguo Road, Beijing , PRC

(Each of QIN Qiong and LIU Dele is hereinafter referred to as a “Grantor” and collectively the “Grantors”)

WHEREAS:

A. 1Verge Internet is a wholly foreign-owned enterprise, duly established and registered in Beijing under the laws of the PRC.

B. The Grantors together hold 100% of the registered capital of 1Verge Information Technology (Beijing) Co., Ltd. (“Beijing 1Verge Infotech”), a limited liability company, with a registered capital of RMB 20,000,000. (the “Equity Interests”), of which QIN Qiong and LIU Dele hold 80% and 20%, respectively.

C. The Grantors entered into an Amended and Restated Loan Agreement on August 16, 2010 (the “Loan Agreement”), pursuant to which 1Verge Internet extended loans in an aggregate amount of RMB 16,000,000 to QIN Qiong and RMB 4,000,000 to LIU Dele respectively (collectively, the “Loans”).

D. Each of the Grantors has agreed to grant exclusively to 1Verge Internet an option to acquire the Equity Interests that have been registered in his/her name, subject to the terms and conditions set forth below. The Grantors entered into two Share Option Agreements with 1Verge Internet with respect to the grant of the option to acquire Equity Interest to 1Verge Internet before the date of this Agreement (collectively, the “Previous Option Agreements”), which were in form and substance similar to this Agreement. The Grantors and 1Verge Internet have strictly complied with all stipulations under the Previous Option Agreements. The Grantors and 1Verge Internet believe it in the best interest of all parties to amend and restate the Previous Option Agreements.

Amended and Restated
Equity Option Agreement	-1-

THEREFORE, Through Friendly Negotiation In The Principle Of Equality And Common Interest, The Parties Agree As Follows:

SECTION 1: GRANT OF THE OPTION

1.1 Grant of Option

Each of the Grantors hereby grants to 1Verge Internet an option (each an “Option” and collectively the “Options”) to acquire their respective Equity Interests at the price equivalent to the lowest price then permitted by PRC laws, and 1Verge Internet shall make payment of such price by cancelling all or a portion of the Loans. Each of the Options shall become vested as of the date of this Agreement.

1.2 Term

This Agreement shall take effect as of the Effective Date and shall remain in full force and effect until the earlier of (1) the date on which all of the Equity Interests have been acquired by 1Verge Internet directly or through its designated representative (individual or legal person); or (2) the unilateral termination by 1Verge Internet (at its sole and absolute discretion), by giving 30 days prior written notice to the Grantors of its intention to terminate this Agreement.

1.3 Consideration of Options

The Grantors acknowledge that 1Verge Internet’s provision of the Loans to the Grantors is deemed to be the consideration for the grant of the Options, the sufficiency and payment of which have been acknowledged and recognized.

1.4 EFFECTIVE DATE

This Agreement shall be effective upon its being signed by the parties hereunder (“Effective Date”).

SECTION 2: EXERCISE OF THE OPTION AND ITS CLOSING

2.1 Timing of Exercise

2.1.1 Each of the Grantors agrees that 1Verge Internet in its sole discretion may at any time, and from time to time after the date hereof, exercise the Option granted by such Grantor, in whole or in part, to acquire all or any portion of their respective Equity Interests.

Amended and Restated
Equity Option Agreement	-2-

2.1.2 For the avoidance of doubt, each of the Grantors hereby agrees that 1Verge Internet shall be entitled to exercise the Option granted by such Grantor for an unlimited number of times, until all of his/her Equity Interests have been acquired by 1Verge Internet.

2.1.3 Each of the Grantors agrees that 1Verge Internet may designate in its sole discretion any third party to exercise the Option granted by such Grantor on its behalf, in which case 1Verge Internet shall provide written notice to such Grantor at the time the Option granted by such Grantor is exercised.

2.2 Transfer

Each of the Grantors agrees that the Option grant by such Grantor shall be freely transferable, in whole or in part, by 1Verge Internet to any third party, and that, upon such transfer, the Option may be exercised by such third party upon the terms and conditions set forth herein, as if such third party were a party to this Agreement, and that such third party shall assume the rights and obligations of 1Verge Internet hereunder.

2.3 Notice Requirement

2.3.1 To exercise an Option, 1Verge Internet shall send a written notice to the relevant Grantor, and such Option is to be exercised by no later than ten (10) days prior to each Closing Date (as defined below), specifying therein:

2.3.1.1 The date of the effective closing of such acquisition (a “Closing Date”);

2.3.1.2 the name of the person in which the Equity Interests shall be registered;

2.3.1.3 the amount of Equity Interests to be acquired from such Grantor;

2.3.1.4 the type of payment; and

2.3.1.5 a letter of authorization, where a third party has been designated to exercise the Option.

2.3.2 For the avoidance of doubt, it is expressly agreed among the parties that 1Verge Internet shall have the right to exercise the Options and elect to register the Equity Interests in the name of another person as it may designates from time to time.

Amended and Restated
Equity Option Agreement	-3-

2.4 Closing

On each Closing Date, 1Verge Internet shall make payment by cancelling all or a portion of the Loans payable by such Grantor to 1Verge Internet, in the same proportion that 1Verge Internet or its designated party acquires the Equity Interest held by such Grantor.

SECTION 3: COMPLETION

3.1 Capital Contribution Transfer Agreement

Concurrently with the execution and delivery of this Agreement, and from time to time upon the request of 1Verge Internet, each of the Grantors shall execute and deliver one or more capital contribution transfer agreements, each in the form and content substantially satisfactory to 1Verge Internet (each a “Transfer Agreement”), together with any other documents necessary to give effect to the transfer to 1Verge Internet or its designated party of all or any part of the Equity Interests upon an exercise of the Option by 1Verge Internet (the “Ancillary Documents”). Each Transfer Agreement and the Ancillary Documents are to be kept in 1Verge Internet’s possession.

Each of the Grantors hereby agrees and authorizes 1Verge Internet to complete, execute and submit to the relevant company registrar any and all Transfer Agreements and the Ancillary Documents to give effect to the transfer of all or any part of the Equity Interests upon an exercise of the Option by 1Verge Internet at its sole discretion where necessary and in accordance with this Agreement.

3.2 Board Resolution

Notwithstanding Section 3.1 above, concurrently with the execution and delivery of this Agreement, and from time to time upon the request of 1Verge Internet, each of Grantors shall execute and deliver one or more resolutions of the board of directors and/or shareholders of Beijing 1Verge Infotech, approving the following:

3.2.1 The transfer by the Grantor of all or part of the Equity Interests held by such Grantor to 1Verge Internet or its designated party; and

3.2.2 any other matters as 1Verge Internet may reasonably request.

Each Resolution is to be kept in 1Verge Internet’s possession.

SECTION 4: REPRESENTATIONS AND WARRANTIES

4.1 Representations and Warranties

Amended and Restated
Equity Option Agreement	-4-

Each of Grantors represents and warrants to 1Verge Internet that:

4.1.1 he/she has the full power and authority to enter into, and perform under, this Agreement;

4.1.2 his/her signing of this Agreement or fulfilling of any its obligations hereunder does not violate any laws, regulations and contracts to which he/she is bound, or require any government authorization or approval;

4.1.3 there is no lawsuit, arbitration or other legal or government procedures pending which, based on his/her knowledge, shall materially and adversely affect this Agreement and the performance thereof;

4.1.4 he/she has disclosed to 1Verge Internet all documents issued by any government department that might cause a material adverse effect on the performance of its obligations under this Agreement;

4.1.5 he/she has not been declared bankrupt by a court of competent jurisdiction;

4.1.6 save as disclosed to 1Verge Internet, his/her Equity Interests is free and clear from all liens, encumbrances and third party rights;

4.1.7 he/she will not transfer, donate, pledge, or otherwise dispose of his/her Equity Interests in any way unless otherwise agreed by 1Verge Internet;

4.1.8 the Option granted to 1Verge Internet by him/her shall be exclusive, and he/she shall in no event grant the Option or any similar rights to a third party by any means whatsoever; and

4.1.9 QIN Qiong further represents and warrants to 1Verge Internet that she owns 80% of the Equity Interests of Beijing 1Verge Infotech, and LIU Dele further represents and warrants to 1Verge Internet that he owns 20% of the Equity Interests of Beijing 1Verge Infotech. The parties hereby agree that the representations and warranties set forth in Sections 4 (except for Section 4.1.9) shall be deemed to be repeated as of each Closing Date as if such representation and warranty were made on and as of such Closing Date.

4.2 Covenants and Undertakings

Each of Grantors covenants and undertakes that:

4.2.1 he/she will complete all such formalities as are necessary to make 1Verge Internet or its designated party a proper and registered shareholder of Beijing 1Verge Infotech. Such formalities include, but are not limited to, assisting 1Verge Internet with the obtaining of necessary approvals of the equity transfer from relevant government authorities (if any), the submission of the Transfer Agreement(s) to the relevant administration for industry and commerce for the purpose of amending the articles of association, changing the shareholder register and undertaking any other changes.

Amended and Restated
Equity Option Agreement	-5-

4.2.2 he/she will, upon request by 1Verge Internet, establish a domestic entity to hold the interests in Beijing 1Verge Infotech as a Chinese joint venture partner in case Beijing 1Verge Infotech is restructured into a foreign-invested telecommunication enterprise.

4.2.3 he/she will not amend the articles of association, increase or decrease the registered capital, sell, transfer, mortgage, create or allow any encumbrance or otherwise dispose of the assets, business, revenues or other beneficial interests, incur or assume any indebtedness, or enter into any material contracts, except in the ordinary course of business (for the purpose of this paragraph, any contract with a value exceeding RMB 100,000 shall be deemed to be a material contract).

SECTION 5: TAXES

Any taxes and duties that might arise from the execution and performance of this Agreement, including any taxes and expenses incurred by and applicable to any of the Grantors as a result of the exercise of the Option(s) by 1Verge Internet or its designated party, or the acquisition of the Equity Interests from the Grantor(s), will be borne by 1Verge Internet.

SECTION 6: GOVERNING LAW AND DISPUTE SETTLEMENT

6.1 Governing Law

The execution, validity, performance and interpretation of this Agreement shall be governed by and construed in accordance with the laws of the PRC.

6.2 Friendly Consultation

If a dispute arises in connection with the interpretation or performance of this Agreement, the parties shall attempt to resolve such dispute through friendly consultations between them or mediation by a neutral third party.

If the dispute cannot be resolved in the aforesaid manner within thirty (30) days after the commencement of such discussions, either party may submit the dispute to arbitration.

Amended and Restated
Equity Option Agreement	-6-

6.3 Arbitration

Any dispute arising in connection with this Agreement shall be submitted to the China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration. The arbitration shall follow the then current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese and shall take place in Beijing. The arbitration award shall be final and binding upon the parties. This article shall not be affected by the termination or elimination of this Agreement.

6.4 Matters not in Dispute

In case of any disputes arising out of the interpretation and performance of this Agreement or any pending arbitration of such dispute, each party shall continue to perform their obligations under this Agreement, except for the matters in dispute.

SECTION 7: CONFIDENTIALITY

7.1 Confidential Information

The contents of this Agreement and the annexes hereof shall be kept confidential. No party shall disclose any such information to any third party (except for the purpose described in Section 2.2 and by prior written agreement among the parties). Each party’s obligations under this clause shall survive after the termination of this Agreement.

7.2 Exceptions

If a disclosure is explicitly required by law, any courts, arbitration tribunals, or administrative authorities, such a disclosure by any party shall not be deemed a violation of Section 7.1 above.

SECTION 8: MISCELLANEOUS

8.1 Entire Agreement

8.1.1 This Agreement constitutes the entire agreement and understanding among the parties in respect of the subject matter hereof and supersedes all prior discussions, negotiations and agreements among them. This Agreement amends and restates all Previous Option Agreements. In the event of any discrepancy between this Agreement and any Previous Option Agreement, this Agreement shall prevail to the extent of the discrepant provisions. This Agreement shall only be amended by a written instrument signed by all the parties.

8.1.2 The appendices attached hereto shall constitute an integral part of this Agreement and shall have the same legal effect as this Agreement.

Amended and Restated
Equity Option Agreement	-7-

8.2 Notices

8.2.1 Unless otherwise designate by the other Party, any notices or other correspondences among the parties in connection with the performance of this Agreement shall be delivered in person, by express mail, e-mail, facsimile or registered mail to the following correspondence addresses and fax numbers:

1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.
Address	:	Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
Fax		:    861059708818
Tele		:    861058851881
Addressee	:	Victor Wing Cheung Koo
QIN Qiong
Address	:	Room 1602, Tower 3, Palm Tree International Apartment, 8 South Chaoyang Park Road, Beijing 100026, China
Fax		:    861059708818
Tele		:    861058851881
Addressee	:	QIN Qiong
LIU Dele
Address	:	Room 1701, Tower D, Sunz Garden, 98 Jianguo Road, Chaoyang District, Beijing 100022, China
Fax		:    861059708818
Tele		:    861058851881
Addressee	:	Liu Dele

8.2.2 Notices and correspondences shall be deemed to have been effectively delivered:

8.2.2.1 at the exact time displayed in the corresponding transmission record, if delivered by facsimile, unless such facsimile is sent after 5:00 pm or on a non-business day in the place where it is received, in which case the date of receipt shall be deemed to be the following business day;

8.2.2.2 on the date that the receiving Party signs for the document, if delivered in person (including express mail);

8.2.2.3 on the fifteenth (15^th) day after the date shown on the registered mail receipt, if sent by registered mail;

8.2.2.4 on the successful printing by the sender of a transmission report evidencing the delivery of the relevant e-mail, if sent by e-mail.

Amended and Restated
Equity Option Agreement	-8-

8.3 Binding Effect

This Agreement, upon being signed by the parties or their duly authorized representatives, shall be binding on the parties and their successors and assigns.

8.4 Language and Counterparts

This Agreement shall be executed in three (3) originals in English, with one (1) original for 1Verge Internet, one (1) original each for Grantors.

8.5 Days and Business Day

A reference to a day herein is to a calendar day. A reference to a business day herein is to a day on which commercial banks are open for business in the PRC.

8.6 Headings

The headings contained herein are inserted for reference purposes only and shall not affect the meaning or interpretation of any part of this Agreement.

8.7 Singular and Plural

Where appropriate, the plural includes the singular and vice versa.

8.8 Unspecified Matter

Any matter not specified in this Agreement shall be handled through mutual discussions among the parties and stipulated in separate documents with binding legal effect, or resolved in accordance with PRC laws.

8.9 Survival of Representations, Warranties, Covenants and Obligations

The respective representations, warranties, covenants and obligations of the parties, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any party, and shall survive the transfer and payment for the Equity Interests.

This Agreement has been signed by the parties or their duly authorized representatives on the date first specified above.

[The space below is intentionally left blank.]

Amended and Restated
Equity Option Agreement	-9-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo
GRANTOR: QIN QIONG
By:	/s/ Qin Qiong
GRANTOR: LIU DELE
By:	/s/ Liu Dele

Amended and Restated
Equity Option Agreement	-10-

EX-10.16

Exhibit 10.16

AMENDED AND RESTATED

EQUITY OPTION AGREEMENT

This Amended and Restated Equity Option Agreement (this “Agreement”) is entered in Beijing, the People’s Republic of China (“PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for the purposes of this Agreement) and dated August 16, 2010, by and among the following parties:

(1) 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD. (“1Verge Internet”)

Legal Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: Victor Wing Cheung Koo

(2) QIN Qiong, a PRC citizen whose PRC identification number is 310108197109214485, and whose residential address is Room 1602, Tower 3, Palm Tree International Apartment, 8 South Chaoyang Park Road, Beijing 100026, PRC

(3) LIU Dele, a PRC citizen whose PRC identification number is 310101196805284437 and whose residential address is, 1701 Tower D, Sunz Garden, 98 Jianguo Road, Beijing, PRC

(Each of QIN Qiong and LIU Dele is hereinafter referred to as a “Grantor” and collectively the “Grantors”)

WHEREAS:

A. 1Verge Internet is a wholly foreign-owned enterprise, duly established and registered in Beijing under the laws of the PRC.

B. The Grantors together hold 100% of the registered capital of Beijing Jiaheyi Advertising Co., Ltd. (“Jiaheyi”), a limited liability company, with a registered capital of RMB 100,000. (the “Equity Interests”), of which QIN Qiong and LIU Dele hold 80% and 20%, respectively.

C. The Grantors entered into an Amended and Restated Loan Agreement on August 16, 2010 (the “Loan Agreement”), pursuant to which 1Verge Internet extended loans in an aggregate amount of RMB 80,000 to QIN Qiong and RMB 20,000 to LIU Dele respectively (collectively, the “Loans”).

D. Each of the Grantors has agreed to grant exclusively to 1Verge Internet an option to acquire the Equity Interests that have been registered in his/her name, subject to the terms and conditions set forth below. The Grantors entered into two Share Option Agreements with 1Verge Internet with respect to the grant of the option to acquire Equity Interest to 1Verge Internet before the date of this Agreement (collectively, the “Previous Option Agreements”), which were in form and substance similar to this Agreement. The Grantors and 1Verge Internet have strictly complied with all stipulations under the Previous Option Agreements. The Grantors and 1Verge Internet believe it in the best interest of all parties to amend and restate the Previous Option Agreements.

Amended and Restated Equity Option Agreement -1-

THEREFORE, Through Friendly Negotiation In The Principle Of Equality And Common Interest, The Parties Agree As Follows:

SECTION 1: GRANT OF THE OPTION

1.1 Grant of Option

Each of the Grantors hereby grants to 1Verge Internet an option (each an “Option” and collectively the “Options”) to acquire their respective Equity Interests at the price equivalent to the lowest price then permitted by PRC laws, and 1Verge Internet shall make payment of such price by cancelling all or a portion of the Loans. Each of the Options shall become vested as of the date of this Agreement.

1.2 Term

This Agreement shall take effect as of the Effective Date and shall remain in full force and effect until the earlier of (1) the date on which all of the Equity Interests have been acquired by 1Verge Internet directly or through its designated representative (individual or legal person); or (2) the unilateral termination by 1Verge Internet (at its sole and absolute discretion), by giving 30 days prior written notice to the Grantors of its intention to terminate this Agreement.

1.3 Consideration of Options

The Grantors acknowledge that 1Verge Internet’s provision of the Loans to the Grantors is deemed to be the consideration for the grant of the Options, the sufficiency and payment of which have been acknowledged and recognized.

1.4 EFFECTIVE DATE

This Agreement shall be effective upon its being signed by the parties hereunder (“Effective Date”).

SECTION 2: EXERCISE OF THE OPTION AND ITS CLOSING

2.1 Timing of Exercise

2.1.1 Each of the Grantors agrees that 1Verge Internet in its sole discretion may at any time, and from time to time after the date hereof, exercise the Option granted by such Grantor, in whole or in part, to acquire all or any portion of their respective Equity Interests.

Amended and Restated Equity Option Agreement -2-

2.1.2 For the avoidance of doubt, each of the Grantors hereby agrees that 1Verge Internet shall be entitled to exercise the Option granted by such Grantor for an unlimited number of times, until all of his/her Equity Interests have been acquired by 1Verge Internet.

2.1.3 Each of the Grantors agrees that 1Verge Internet may designate in its sole discretion any third party to exercise the Option granted by such Grantor on its behalf, in which case 1Verge Internet shall provide written notice to such Grantor at the time the Option granted by such Grantor is exercised.

2.2 Transfer

Each of the Grantors agrees that the Option grant by such Grantor shall be freely transferable, in whole or in part, by 1Verge Internet to any third party, and that, upon such transfer, the Option may be exercised by such third party upon the terms and conditions set forth herein, as if such third party were a party to this Agreement, and that such third party shall assume the rights and obligations of 1Verge Internet hereunder.

2.3 Notice Requirement

2.3.1 To exercise an Option, 1Verge Internet shall send a written notice to the relevant Grantor, and such Option is to be exercised by no later than ten (10) days prior to each Closing Date (as defined below), specifying therein:

2.3.1.1 The date of the effective closing of such acquisition (a “Closing Date”);

2.3.1.2 the name of the person in which the Equity Interests shall be registered;

2.3.1.3 the amount of Equity Interests to be acquired from such Grantor;

2.3.1.4 the type of payment; and

2.3.1.5 a letter of authorization, where a third party has been designated to exercise the Option.

2.3.2 For the avoidance of doubt, it is expressly agreed among the parties that 1Verge Internet shall have the right to exercise the Options and elect to register the Equity Interests in the name of another person as it may designates from time to time.

Amended and Restated Equity Option Agreement -3-

2.4 Closing

On each Closing Date, 1Verge Internet shall make payment by cancelling all or a portion of the Loans payable by such Grantor to 1Verge Internet, in the same proportion that 1Verge Internet or its designated party acquires the Equity Interest held by such Grantor.

SECTION 3: COMPLETION

3.1 Capital Contribution Transfer Agreement

Concurrently with the execution and delivery of this Agreement, and from time to time upon the request of 1Verge Internet, each of the Grantors shall execute and deliver one or more capital contribution transfer agreements, each in the form and content substantially satisfactory to 1Verge Internet (each a “Transfer Agreement”), together with any other documents necessary to give effect to the transfer to 1Verge Internet or its designated party of all or any part of the Equity Interests upon an exercise of the Option by 1Verge Internet (the “Ancillary Documents”). Each Transfer Agreement and the Ancillary Documents are to be kept in 1Verge Internet’s possession.

Each of the Grantors hereby agrees and authorizes 1Verge Internet to complete, execute and submit to the relevant company registrar any and all Transfer Agreements and the Ancillary Documents to give effect to the transfer of all or any part of the Equity Interests upon an exercise of the Option by 1Verge Internet at its sole discretion where necessary and in accordance with this Agreement.

3.2 Board Resolution

Notwithstanding Section 3.1 above, concurrently with the execution and delivery of this Agreement, and from time to time upon the request of 1Verge Internet, each of Grantors shall execute and deliver one or more resolutions of the board of directors and/or shareholders of Jiaheyi, approving the following:

3.2.1 The transfer by the Grantor of all or part of the Equity Interests held by such Grantor to 1Verge Internet or its designated party; and

3.2.2 any other matters as 1Verge Internet may reasonably request.

Each Resolution is to be kept in 1Verge Internet’s possession.

Amended and Restated Equity Option Agreement -4-

SECTION 4: REPRESENTATIONS AND WARRANTIES

4.1 Representations and Warranties

Each of Grantors represents and warrants to 1Verge Internet that:

4.1.1 he/she has the full power and authority to enter into, and perform under, this Agreement;

4.1.2 his/her signing of this Agreement or fulfilling of any its obligations hereunder does not violate any laws, regulations and contracts to which he/she is bound, or require any government authorization or approval;

4.1.3 there is no lawsuit, arbitration or other legal or government procedures pending which, based on his/her knowledge, shall materially and adversely affect this Agreement and the performance thereof;

4.14 he/she has disclosed to 1Verge Internet all documents issued by any government department that might cause a material adverse effect on the performance of its obligations under this Agreement;

4.1.5 he/she has not been declared bankrupt by a court of competent jurisdiction;

4.1.6 save as disclosed to 1Verge Internet, his/her Equity Interests is free and clear from all liens, encumbrances and third party rights;

4.1.7 he/she will not transfer, donate, pledge, or otherwise dispose of his/her Equity Interests in any way unless otherwise agreed by 1Verge Internet;

4.1.8 the Option granted to 1Verge Internet by him/her shall be exclusive, and he/she shall in no event grant the Option or any similar rights to a third party by any means whatsoever; and

4.1.9 QIN Qiong further represents and warrants to 1Verge Internet that she owns 80% of the Equity Interests of Jiaheyi, and LIU Dele further represents and warrants to 1Verge Internet that he owns 20% of the Equity Interests of Jiaheyi. The parties hereby agree that the representations and warranties set forth in Sections 4 (except for Section 4.1.9) shall be deemed to be repeated as of each Closing Date as if such representation and warranty were made on and as of such Closing Date.

4.2 Covenants and Undertakings

Each of Grantors covenants and undertakes that:

4.2.1 he/she will complete all such formalities as are necessary to make 1Verge Internet or its designated party a proper and registered shareholder of Jiaheyi. Such formalities include, but are not limited to, assisting 1Verge Internet with the obtaining of necessary approvals of the equity transfer from relevant government authorities (if any), the submission of the Transfer Agreement(s) to the relevant administration for industry and commerce for the purpose of amending the articles of association, changing the shareholder register and undertaking any other changes.

Amended and Restated Equity Option Agreement -5-

4.2.2 he/she will not amend the articles of association, increase or decrease the registered capital, sell, transfer, mortgage, create or allow any encumbrance or otherwise dispose of the assets, business, revenues or other beneficial interests, incur or assume any indebtedness, or enter into any material contracts, except in the ordinary course of business (for the purpose of this paragraph, any contract with a value exceeding RMB 100,000 shall be deemed to be a material contract).

SECTION 5: TAXES

Any taxes and duties that might arise from the execution and performance of this Agreement, including any taxes and expenses incurred by and applicable to any of the Grantors as a result of the exercise of the Option(s) by 1Verge Internet or its designated party, or the acquisition of the Equity Interests from the Grantor(s), will be borne by 1Verge Internet.

SECTION 6: GOVERNING LAW AND DISPUTE SETTLEMENT

6.1 Governing Law

The execution, validity, performance and interpretation of this Agreement shall be governed by and construed in accordance with the laws of the PRC.

6.2 Friendly Consultation

If a dispute arises in connection with the interpretation or performance of this Agreement, the parties shall attempt to resolve such dispute through friendly consultations between them or mediation by a neutral third party.

If the dispute cannot be resolved in the aforesaid manner within thirty (30) days after the commencement of such discussions, either party may submit the dispute to arbitration.

Amended and Restated Equity Option Agreement -6-

6.3 Arbitration

Any dispute arising in connection with this Agreement shall be submitted to the China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration. The arbitration shall follow the then current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese and shall take place in Beijing. The arbitration award shall be final and binding upon the parties. This article shall not be affected by the termination or elimination of this Agreement.

6.4 Matters not in Dispute

In case of any disputes arising out of the interpretation and performance of this Agreement or any pending arbitration of such dispute, each party shall continue to perform their obligations under this Agreement, except for the matters in dispute.

SECTION 7: CONFIDENTIALITY

7.1 Confidential Information

The contents of this Agreement and the annexes hereof shall be kept confidential. No party shall disclose any such information to any third party (except for the purpose described in Section 2.2 and by prior written agreement among the parties). Each party’s obligations under this clause shall survive after the termination of this Agreement.

7.2 Exceptions

If a disclosure is explicitly required by law, any courts, arbitration tribunals, or administrative authorities, such a disclosure by any party shall not be deemed a violation of Section 7.1 above.

SECTION 8: MISCELLANEOUS

8.1 Entire Agreement

8.1.1 This Agreement constitutes the entire agreement and understanding among the parties in respect of the subject matter hereof and supersedes all prior discussions, negotiations and agreements among them. This Agreement amends and restates all Previous Option Agreements. In the event of any discrepancy between this Agreement and any Previous Option Agreement, this Agreement shall prevail to the extent of the discrepant provisions. This Agreement shall only be amended by a written instrument signed by all the parties.

Amended and Restated Equity Option Agreement -7-

8.1.2 The appendices attached hereto shall constitute an integral part of this Agreement and shall have the same legal effect as this Agreement.

8.2 Notices

8.2.1 Unless otherwise designate by the other Party, any notices or other correspondences among the parties in connection with the performance of this Agreement shall be delivered in person, by express mail, e-mail, facsimile or registered mail to the following correspondence addresses and fax numbers:

1Verge INTERNET TECHNOLOGY (BEIJING) CO., LTD.
Address	:	Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
Fax		:    861059708818
Tele		:    861058851881
Addressee	:	Victor Wing Cheung Koo
QIN Qiong
Address	:	Room 1602, Tower 3, Palm Tree International Apartment, 8 South Chaoyang Park Road, Beijing 100026, China
Fax		:    861059708818
Tele		:    861058851881
Addressee	:	QIN Qiong
LIU Dele
Address	:	Room 1701, Tower D, Sunz Garden, 98 Jianguo Road, Chaoyang District, Beijing 100022, China
Fax		:    861059708818
Tele		:    861058851881
Addressee	:	Liu Dele

8.2.2 Notices and correspondences shall be deemed to have been effectively delivered:

8.2.2.1 at the exact time displayed in the corresponding transmission record, if delivered by facsimile, unless such facsimile is sent after 5:00 pm or on a non-business day in the place where it is received, in which case the date of receipt shall be deemed to be the following business day;

8.2.2.2 on the date that the receiving Party signs for the document, if delivered in person (including express mail);

8.2.2.3 on the fifteenth (15^th) day after the date shown on the registered mail receipt, if sent by registered mail;

Amended and Restated Equity Option Agreement -8-

8.2.2.4 on the successful printing by the sender of a transmission report evidencing the delivery of the relevant e-mail, if sent by e-mail.

8.3 Binding Effect

This Agreement, upon being signed by the parties or their duly authorized representatives, shall be binding on the parties and their successors and assigns.

8.4 Language and Counterparts

This Agreement shall be executed in three (3) originals in English, with one (1) original for 1Verge Internet, one (1) original each for Grantors.

8.5 Days and Business Day

A reference to a day herein is to a calendar day. A reference to a business day herein is to a day on which commercial banks are open for business in the PRC.

8.6 Headings

The headings contained herein are inserted for reference purposes only and shall not affect the meaning or interpretation of any part of this Agreement.

8.7 Singular and Plural

Where appropriate, the plural includes the singular and vice versa.

8.8 Unspecified Matter

Any matter not specified in this Agreement shall be handled through mutual discussions among the parties and stipulated in separate documents with binding legal effect, or resolved in accordance with PRC laws.

8.9 Survival of Representations, Warranties, Covenants and Obligations

The respective representations, warranties, covenants and obligations of the parties, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any party, and shall survive the transfer and payment for the Equity Interests.

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Amended and Restated Equity Option Agreement -9-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo
GRANTOR: QIN QIONG
By:	/s/ Qin Qiong
GRANTOR: LIU DELE
By:	/s/ Liu Dele

Amended and Restated Equity Option Agreement -10-

EX-10.17

Exhibit 10.17

AMENDED AND RESTATED

LOAN AGREEMENT

This Amended and Restated Loan Agreement (this “Agreement”) was entered in Beijing, the People’s Republic of China (“PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for purposes of this agreement) and dated August 16, 2010

by and among the following parties:

(1) 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD. (the “Lender”)

Registered Address: Sections A and C, 5/F, SinoSteel Plaza, No. 8, Haidian Street, Haidian District, Beijing, PRC.

Legal Representative: Victor Wing Cheung Koo

and

(2) QIN Qiong and LIU Dele (each a “Borrower” and jointly the “Borrowers”)

WHEREAS:

A. QIN Qiong currently holds 80% equity interest (amounting to RMB 16,000,000) in 1Verge Information Technology (Beijing) Co., Ltd. (“Beijing 1Verge Infotech “) and LIU Dele holds 20% equity interest (amounting to RMB 4,000,000) in Beijing 1Verge Infotech.

B. In order to contribute the initial registered capital of Beijing 1Verge Infotech of RMB 1,000,000 and the subsequent increased registered capital in an aggregate amount of RMB 19,000,000, the Borrowers had requested from the Lender financial support in an aggregate amount of RMB 20,000,000. The Lender had agreed to provide such financial support and concluded with the Borrowers loan agreements in February 2006 and November 2007, respectively (“Previous Loan Agreements”).

C. Both the Lender and the Borrowers believe it in the best interest of the parties and Beijing 1Verge Infotech to amend and restate the Previous Loan Agreements to clarify and streamline the rights and obligations of the Borrower and the Lender under the Previous Loan Agreements.

THEREFORE, the Parties, through friendly negotiation based on equal and mutual benefit, agree as follows:

1A. EFFECTIVE DATE

This Agreement shall be effective upon its being signed by the parties hereunder. Notwithstanding the foregoing, the Lender and the Borrowers confirm that the Loans were duly and fully extended by the Lender prior to the execution of this Agreement.

Amended and Restated Loan Agreement -1-

1. Purpose and Sum of the Loan

1.1 Subject to the terms and conditions set forth in this Agreement, Lender has agreed to lend to QIN Qiong in the principal amount of up to RMB 16,000,000 and lend to LIU Dele in the principal amount of up to RMB4,000,000 (each loan principal drawn by the Borrower referred to as a “Loan”, and collectively the “Loans”), both paid in RMB. Such Loans shall be interest-free throughout the term of the Loans.

1.2 Subject to the conditions precedent set forth below, Lender has transferred in installments the balance of the principal amount a Borrower is entitled to under this Agreement within 7 days of receipt by Lender of a drawdown request delivered by such Borrower. No principal shall be disbursed unless a drawdown request in writing is delivered within 180 days of the execution of this Agreement, Borrower shall confirm in writing the receipt of the payment immediately upon the Borrower’s receipt of the payment.

2. Loan Terms

2.1 The term for such Loans will be ten (10) years, calculated from the date when the Borrowers actually draw each of the Loans. The term under this Agreement shall be automatically extended for another ten years except the written notice to the opposite is given by the Lender three months prior to the expiration of this Agreement.

2.2 The Borrowers hereby jointly agree and warrant that such loan provided by the Lender shall be used only for the investment in the Beijing 1Verge Infotech. Without the Lender’s prior written consent, the Borrowers shall not transfer or pledge its equity interest hereunder to any other third party.

2.3 The Lender and the Borrower jointly agree and confirm that the Borrowers shall not repay the Loans in advance except for Lender’s requirement or the expiration of this Agreement. Each Borrower shall repay the Loans only in the following way and amount: the Borrower shall repay the Loans only by using all the funds obtained by such Borrower from transferring all of the Borrower’s equity in Beijing 1Verge Infotech to Lender or to any other third party designated by the Lender. In case the funds received by such borrower from transferring the aforesaid equity is subject to any tax or administrative expenses, the borrower shall only be obliged to repay the net portion of such funds (after deducting any applicable tax and expenses) to the Lender. When all of such Borrower’s equity in Beijing 1Verge Infotech is transferred as stipulated above and if all the fund thereof is repaid to the Lender by the Borrower, all the outstanding Loan(s) hereunder shall be regarded as repaid.

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2.4 The Lender and the Borrowers agree and confirm that each Borrower shall immediately repay the Loans in advance in case any one of the following occurs:

2.4.1 A Borrower dies or becomes a person with no or limited capacity for civil rights;

2.4.2 Victor Wing Cheung Koo (the current president of Lender) quits or is dismissed from the Lender or the Lender’s affiliated corporations;

2.4.3 The Borrower commits crime or is involved in crime;

2.4.4 Any third party claims debt of the Borrower exceeding RMB1,000,000 (RMB one million) which the Borrower is not able to repay;

2.4.5 There are no legal restrictions for foreign investors to directly invest in the value-added telecommunication business or online audiovisual streaming business under PRC law; or

2.4.6 In the event that the Lender issues a written notice to the Borrower for repayment of the Loans.

3. Conditions Precedent to the Disbursment of the Loans

3.1 Lender shall not be obliged to make any disbursement of the Loans unless all of the following conditions have been satisfied or written waiver to all the conditions that have not been satisfied has been obtained:

3.1.1 The Borrower has delivered the written drawdown request pursuant to Section 1.2 of this Agreement and the drawdown amount requested in the request does not exceed the available balance.

3.1.2 All the representations and warranties made by the Borrowers are correct, accurate, complete and not misleading.

3.1.3 The Borrowers are not in breach of the covenants and undertakings made by such Borrower in Section 5 hereof.

Amended and Restated Loan Agreement -3-

3.1.4 Simultaneously with the execution of this Agreement, the parties have executed an Amended and Restated Equity Option Agreement (“Option Agreement”), pursuant to which the Borrowers grant to the Lender or its designated person (legal or natural) an exclusive option to purchase all of the Borrowers’ equity interest in Beijing 1Verge Infotech, to the extent permitted under PRC laws.

3.1.5 Simultaneously with the execution of this Agreement, the parties have executed an Amended and Restated Equity Interest Pledge Agreement (“Pledge Agreement”), pursuant to which the Borrowers have pledged all of their equity interest in Beijing 1Verge Infotech to the Lender, to the extent permitted under PRC laws.

4. Representations and Warranties

4.1 Each of the Borrowers makes the following representations and warranties to the Lender, and confirm that the Lender execute and perform this Agreement in reliance of such representations and warranties:

4.1.1 The Borrower has the full capacity for civil rights and has the power to enter into this Agreement;

4.1.2 The execution of this Agreement of the Borrower will not violate any law or binding obligations;

4.1.3 This Agreement shall constitute a binding obligation of the Borrower, enforceable against him/her in accordance with its terms upon its execution;

4.1.4 The Borrower neither commits criminal behaviors nor is involved in criminal activity;

4.1.5 Except for the option under the Option Agreement and the pledge under the Pledge Agreement, without the prior consent of the Lender, the Borrower shall not create any pledge over part or whole of the Borrower’s shareholder’s right in Beijing 1Verge Infotech or any priority for any third party with the beneficiary neither the Lender nor its subsidiaries or affiliates;

4.2 The Lender makes the following representations and warranties to the Borrowers:

4.2.1 The Lender is a company registered and validly existing under the laws of PRC;

Amended and Restated Loan Agreement -4-

4.2.2 The execution and performance of this Agreement by the Lender is in compliance with the power of the Lender. The Lender has taken proper measures and has gained authorizations and approvals for the execution and performance of this Agreement from the third party and governmental departments in accordance with the limitations of the laws and contracts which are binding or bear influences over the Lender;

4.2.3 This Agreement shall constitute the legal, valid and binding obligations of the Lender, which is enforceable against the Lender in accordance with its terms upon its execution.

5. Covenants and Undertakings of Borrowers

5.1 Each Borrower, as a shareholder of Beijing 1Verge Infotech hereby undertakes to, and jointly causes Beijing 1Verge Infotech to observe the following terms with all efforts during the term of this Agreement:

5.1.1 It shall not modify in any way its articles of association or alter its shareholding structure without the prior written consent of the Lender;

5.1.2 It shall not transfer or dispose of any material asset, or create any other security interest neither for the Lender nor for its subsidiaries / affiliates over the same without the prior written consent of the Lender;

5.1.3 It shall not provide any warranty or assume any debt for any third party which is beyond its normal daily business scope without the prior written consent of the Lender;

5.1.4 It shall not enter into any material contracts without the prior written consent of the Lender, except those entered into in the ordinary course of business (for the purpose of this paragraph, any contract with a value exceeding RMB 100,000 shall be deemed to be a material contract);

5.1.5 It shall not extend any loan or credit to any party without the prior written consent of the Lender;

5.1.6 It shall not merge with or invest in any third party without the prior written consent of the Lender;

5.1.7 It shall not declare in any way any bonus or dividends for its shareholders without the prior written consent of the Lender;

Amended and Restated Loan Agreement -5-

5.2 Each Borrower further commits to the Lender, within the term of this Agreement, as follows:

5.2.1 It shall take all the measures to guarantee and maintain its identification and status as a shareholder of Beijing 1Verge Infotech;

5.2.2 it shall not transfer or dispose of any of its equity interest or other rights or powers pertinent to its equity interest in Beijing 1Verge Infotech;

5.2.3 it shall procure that the shareholders’ meeting of Beijing 1Verge Infotech shall not pass any decision about its merger with or investment in any third party without the prior written consent of the Lender;

5.2.4 it shall not carry out any action bearing material influences on the assets, business, obligations or liabilities of Beijing 1Verge Infotech without prior written consent of the Lender;

5.2.5 it shall immediately and unconditionally transfer all or part of its equity interest in Beijing 1Verge Infotech to Lender or any third party designated by the Lender in accordance with PRC laws and, where applicable, procure all the other shareholders of Beijing 1Verge Infotech waive any prior right over purchasing such shares, as required by the Lender;

5.2.6 it shall strictly observe its commitments and guarantees under this Agreement and other related agreements.

5.3 Each Borrower hereby covenants and undertakes that upon the signing of this Agreement, the Borrower shall:

5.3.1 pledge all equity interest in Beijing 1Verge Infotech held by the Borrower for the benefit of Lender to guarantee the due repayment of the Loans hereunder, the payment of the service fees under the Amended and Restated Exclusive Technical and Consulting Services Agreement and the license fees under the Amended and Restated Domain Name Licensing Agreement and the Amended and Restated Trademark Licensing Agreement, and enter into the Amended and Restated Equity Interest Pledge Agreement with Lender;

5.3.2 appoint and authorize individuals designated by the Lender to exercise the rights and powers pertinent to the equity interest in Beijing 1Verge Infotech held by the Borrowers simultaneously with the execution of this Agreement and sign and deliver a power of attorney;

Amended and Restated Loan Agreement -6-

5.3.3 confirm and ratify in the capacity of a shareholder of Beijing 1Verge Infotech that the Borrowers are bound by the Amended and Restated Business Operation Agreement entered into by the Lender, Beijing1Verge Infotech and the Borrowers on August 16, 2010;

5.3.4 confirm and agree that the Lender shall have the right to acquire or to designate any third party of its choice to acquire from time to time part or all of the equity interest of Beijing 1Verge Infotech from the Borrowers at an agreed price and enter into the Option Agreement.

6. Default

If a Borrower fails to perform its repayment obligation pursuant to this Agreement, an overdue interest at the rate of 0.01% per day upon the outstanding amount of the Loans shall be payable to the Lender.

7. Confidentiality

7.1 The Parties acknowledge and confirm to take all possible measures to keep confidential all the confidential materials and information (the “Confidential Information”) they get to know by this Agreement. The Parties shall not disclose, provide or transfer such Confidential Information to any third party without the prior written consent of the other Party. In case of the termination of this Agreement, the receiving party of the Confidential Information shall return or destroy all the files, materials or software as required by the disclosing party, and delete any of the Confidential Information from any memory equipments and discontinue using such Confidential Information.

7.2 The parties agree that this Section 7 shall survive the modification and termination of this Agreement.

8. Notices

Unless a written notice of change of address is issued, all correspondence relating to this Agreement shall be delivered in person, or by registered or prepaid mail, or by recognized express services or facsimile to the addresses appointed by the other party from time to time.

9. Governing Law and Dispute Settlement

9.1 The execution, validity, performance and interpretation of this Agreement shall be governed by and construed in accordance with the laws of the PRC.

9.2 The parties shall strive to settle any dispute arising from the interpretation or performance through friendly consultation. In case no settlement can be reached through consultation, either party may submit such matter to China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration. The arbitration shall follow the then current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese and shall take place in Beijing. The arbitration award shall be final and binding upon the parties. This article shall not be affected by the termination or elimination of this Agreement.

Amended and Restated Loan Agreement -7-

9.3 In case of any disputes arising out of the interpretation and performance of this Agreement or any pending arbitration of such dispute, each party shall continue to perform their obligations under this Agreement, except for the matters in dispute.

10. Force Majeure

10.1 Force Majeure refers to any accident which is beyond the party’s control and is inevitable with the reasonable care of the other party who shall be influenced, including but not limited to governmental activity, natural force, fire, explosion, storm, flood, earthquake, tide, lightening or war. However, the credit, capital or shortage of financing shall not be deemed as the matters beyond one party’s reasonable control. The Party influenced by the Force Majeure and seeking for exemption hereunder shall notify the other party as soon as possible and inform the other party of the measures to take in order to accomplish the performance of this Agreement.

10.2 In case the performance of this Agreement is delayed or cumbered by the above-referenced Force Majeure, the party who is influenced by the Force Majeure shall not bear any liability within the scope of delay and cumbrance, and shall take all the proper measures to reduce or eliminate the influence of Force Majeure, and shall make efforts to renew the performance of its obligations hereunder which has been delayed or cumbered by the Force Majeure. Each party shall try its best to restore the performance of this Agreement once the Force Majeure is eliminated.

11. Miscellaneous

11.1 Any modification, termination or waiver of this Agreement shall not take effect without the written consent of each party.

11.2 Any appendix attached hereto shall be of the same effect as this Agreement.

11.3 No Borrower shall transfer its rights and obligations hereunder to any third party without the prior written consent of the Lender.

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11.4 In case any terms and stipulations in this Agreement is regarded as illegal or cannot be performed in accordance with the applicable law, it shall be deemed to be deleted from this Agreement and lose its effect and this Agreement shall remain its effect and be treated as without it from the very beginning. Each party shall replace the deleted stipulations with those lawful and effective ones, which are acceptable to the Lender, through mutual negotiation.

11.5 This Agreement amends and restates all Previous Loan Agreements. In the event of any discrepancy between this Agreement and any Previous Loan Agreement, this Agreement shall prevail to the extent of the discrepant provisions.

[The space below is intentionally left blank.]

Amended and Restated Loan Agreement -9-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)
By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo
BORROWER: QIN QIONG
By:	/s/ Qin Qiong
BORROWER: LIU DELE
By:	/s/ Liu Dele

Amended and Restated Loan Agreement -10-

EX-10.18

Exhibit 10.18

AMENDED AND RESTATED

LOAN AGREEMENT

This Amended and Restated Loan Agreement (this “Agreement”) was entered in Beijing, the People’s Republic of China (“PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for purposes of this agreement) and dated August 16, 2010

by and among the following parties:

(1) 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD. (the “Lender”)

Registered Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: Victor Wing Cheung Koo

and

(2) QIN Qiong and LIU Dele (each a “Borrower” and jointly the “Borrowers”)

WHEREAS:

A. QIN Qiong currently holds 80% equity interest (amounting to RMB 80,000) in Jiaheyi Advertising (Beijing) Co., Ltd. (“Jiaheyi”) and LIU Dele holds 20% equity interest (amounting to RMB 20,000) in Jiaheyi.

B. In order to contribute the initial registered capital of Jiaheyi of RMB 100,000, the Borrowers had requested from the Lender financial support in an aggregate amount of RMB 100,000. The Lender had agreed to provide such financial support and concluded with the Borrowers loan agreements in February 2006 and November 2007, respectively (“Previous Loan Agreements”), pursuant to which the Lender extended the Loans (as defined below) to the Borrowers.

C. Both the Lender and the Borrowers believe it in the best interest of the parties and Jiaheyi to amend and restate the Previous Loan Agreements to clarify and streamline the rights and obligations of the Borrowers and the Lender under the Previous Loan Agreements.

THEREFORE, the Parties, through friendly negotiation based on equal and mutual benefit, agree as follows:

1A. EFFECTIVE DATE

This Agreement shall be effective upon its being signed by the parties hereunder. Notwithstanding the foregoing, the Lender and the Borrowers confirm that the Loans were duly and fully extended by the Lender in accordance with the Previous Loan Agreements.

Amended and Restated Loan Agreement -1-

1. Purpose and Sum of the Loan

1.1 Subject to the terms and conditions set forth in this Agreement, Lender has agreed to lend to QIN Qiong in the principal amount of up to RMB 80,000 and lend to LIU Dele in the principal amount of up to RMB20,000 (each loan principal drawn by the Borrower referred to as a “Loan”, and collectively the “Loans”), both paid in RMB. Such Loans shall be interest-free throughout the term of the Loans.

1.2 Subject to the conditions precedent set forth below, Lender has transferred in installments the balance of the principal amount Borrower is entitled to under this Agreement within 7 days of receipt by Lender of a drawdown request delivered by such Borrower. No principal shall be disbursed unless a drawdown request in writing is delivered within 180 days of the execution of this Agreement, Borrower shall confirm in writing the receipt of the payment immediately upon the Borrower’s receipt of the payment.

2. Loan Terms

2.1 The term for such Loans will be ten (10) years, calculated from the date when the Borrowers actually draw the Loans. The term under this Agreement shall be automatically extended for another ten years except the written notice to the opposite is given by the Lender three months prior to the expiration of this Agreement.

2.2 The Borrowers hereby jointly agree and warrant that such loan provided by the Lender shall be used only for the investment in the Jiaheyi. Without the Lender’s prior written consent, the Borrowers shall not transfer or pledge its equity interest hereunder to any other third party.

2.3 The Lender and the Borrower jointly agree and confirm that the Borrowers shall not repay the Loans in advance except for Lender’s requirement or the expiration of this Agreement. Each Borrower shall repay the Loans only in the following way and amount: the Borrower shall repay the Loans only by using all the funds obtained by such Borrower from transferring all of the Borrower’s equity in Jiaheyi to Lender or to any other third party designated by the Lender. In case the funds received by such borrower from transferring the aforesaid equity is subject to any tax or administrative expenses, the borrower shall only be obliged to repay the net portion of such funds (after deducting any applicable tax and expenses) to the Lender. When all of such Borrower’s equity in Jiaheyi is transferred as stipulated above and if all the fund thereof is repaid to the Lender by the Borrower, all the outstanding Loan(s) hereunder shall be regarded as repaid.

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2.4 The Lender and the Borrowers agree and confirm that each Borrower shall immediately repay the Loans in advance in case any one of the following occurs:

2.4.1 A Borrower dies or becomes a person with no or limited capacity for civil rights;

2.4.2 Victor Wing Cheung Koo (the current president of Lender) quits or is dismissed from the Lender or the Lender’s affiliated corporations;

2.4.3 The Borrower commits crime or is involved in crime;

2.4.4 Any third party claims debt of the Borrower exceeding RMB1,000,000 (RMB one million) which the Borrower is not able to repay;

2.4.5 There are no legal restrictions for foreign investors to directly invest in the advertising agency and publishing businesses under PRC law; or

2.4.6 In the event that the Lender issues a written notice to the Borrower for repayment of the Loans.

3. Conditions Precedent to the Disbursment of the Loans

3.1 Lender shall not be obliged to make any disbursement of the Loans unless all of the following conditions have been satisfied or written waiver to all the conditions that have not been satisfied has been obtained:

3.1.1 The Borrower has delivered the written drawdown request pursuant to Section 1.2 of this Agreement and the drawdown amount requested in the request does not exceed the available balance.

3.1.2 All the representations and warranties made by the Borrowers are correct, accurate, complete and not misleading.

3.1.3 The Borrowers are not in breach of the covenants and undertakings made by such Borrower in Section 5 hereof.

3.1.4 Simultaneously with the execution of this Agreement, the parties have executed an Amended and Restated Equity Option Agreement (“Option Agreement”), pursuant to which the Borrowers grant to the Lender or its designated person (legal or natural) an exclusive option to purchase all of the Borrowers’ equity interest in Jiaheyi, to the extent permitted under PRC laws.

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3.1.5 Simultaneously with the execution of this Agreement, the parties have executed an Amended and Restated Equity Interest Pledge Agreement (“Pledge Agreement”), pursuant to which the Borrowers have pledged all of their equity interest in Jiaheyi to the Lender, to the extent permitted under PRC laws.

4. Representations and Warranties

4.1 Each of the Borrowers makes the following representations and warranties to the Lender, and confirms that the Lender execute and perform this Agreement in reliance of such representations and warranties:

4.1.1 The Borrower has the full capacity for civil rights and has the power to enter into this Agreement;

4.1.2 The execution of this Agreement of the Borrower will not violate any law or binding obligations;

4.1.3 This Agreement shall constitute a binding obligation of the Borrower, enforceable against him/her in accordance with its terms upon its execution;

4.1.4 The Borrower neither commits criminal behaviors nor is involved in criminal activity;

4.1.5 Except for the option under the Option Agreement and the pledge under the Pledge Agreement, without the prior consent of the Lender, the Borrower shall not create any pledge over part or whole of the Borrower’s shareholder’s right in Jiaheyi or any priority for any third party with the beneficiary neither the Lender nor its subsidiaries or affiliates.

4.2 The Lender makes the following representations and warranties to the Borrowers:

4.2.1 The Lender is a company registered and validly existing under the laws of PRC;

4.2.2 The execution and performance of this Agreement by the Lender is in compliance with the power of the Lender. The Lender has taken proper measures and has gained authorizations and approvals for the execution and performance of this Agreement from the third party and governmental departments in accordance with the limitations of the laws and contracts which are binding or bear influences over the Lender;

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4.2.3 This Agreement shall constitute the legal, valid and binding obligations of the Lender, which is enforceable against the Lender in accordance with its terms upon its execution.

5. Covenants and Undertakings of Borrowers

5.1 Each Borrower, as a shareholder of Jiaheyi hereby undertakes to, and jointly causes Jiaheyi to observe the following terms with all efforts during the term of this Agreement:

5.1.1 It shall not modify in any way its articles of association or alter its shareholding structure without the prior written consent of the Lender;

5.1.2 It shall not transfer or dispose of any material asset, or create any other security interest neither for the Lender nor for its subsidiaries / affiliates over the same without the prior written consent of the Lender;

5.1.3 It shall not provide any warranty or assume any debt for any third party which is beyond its normal daily business scope without the prior written consent of the Lender;

5.1.4 It shall not enter into any material contracts without the prior written consent of the Lender, except those entered into in the ordinary course of business (for the purpose of this paragraph, any contract with a value exceeding RMB100,000 shall be deemed to be a material contract);

5.1.5 It shall not extend any loan or credit to any party without the prior written consent of the Lender;

5.1.6 It shall not merge with or invest in any third party without the prior written consent of the Lender;

5.1.7 It shall not declare in any way any bonus or dividends for its shareholders without the prior written consent of the Lender;

5.2 Each Borrower further commits to the Lender, within the term of this Agreement, as follows:

5.2.1 It shall take all the measures to guarantee and maintain its identification and status as a shareholder of Jiaheyi;

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5.2.2 it shall not transfer or dispose of any of its equity interest or other rights or powers pertinent to its equity interest in Jiaheyi;

5.2.3 it shall procure that the shareholders’ meeting of Jiaheyi shall not pass any decision about its merger with or investment in any third party without the prior written consent of the Lender;

5.2.4 it shall not carry out any action bearing material influences on the assets, business, obligations or liabilities of Jiaheyi without prior written consent of the Lender;

5.2.5 it shall immediately and unconditionally transfer all or part of its equity interest in Jiaheyi to Lender or any third party designated by the Lender in accordance with PRC laws and, where applicable, procure all the other shareholders of Jiaheyi waive any prior right over purchasing such shares, as required by the Lender;

5.2.6 it shall strictly observe its commitments and guarantees under this Agreement and other related agreements.

5.3 Each Borrower hereby covenants and undertakes that upon the signing of this Agreement, the Borrower shall:

5.3.1 pledge all equity interest in Jiaheyi held by the Borrower for the benefit of Lender to guarantee, among others, the due repayment of the Loans hereunder and the payment of the service fees under the Amended and Restated Exclusive Technical and Consulting Services Agreement, and enter into the Amended and Restated Equity Interest Pledge Agreement with Lender;

5.3.2 appoint and authorize individuals designated by the Lender to exercise the rights and powers pertinent to the equity interest in Jiaheyi held by the Borrowers simultaneously with the execution of this Agreement and sign and deliver a power of attorney;

5.3.3 confirm and ratify in the capacity of a shareholder of Jiaheyi that the Borrowers are bound by the Amended and Restated Business Operation Agreement entered into by the Lender, Jiaheyi and the Borrowers on August 16, 2010;

5.3.4 confirm and agree that the Lender shall have the right to acquire or to designate any third party of its choice to acquire from time to time part or all of the equity interest of Jiaheyi from the Borrowers at an agreed price and enter into the Option Agreement.

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6. Default

If a Borrower fails to perform its repayment obligation pursuant to this Agreement, an overdue interest at the rate of 0.01% per day upon the outstanding amount of the Loans shall be payable to the Lender.

7. Confidentiality

7.1 The Parties acknowledge and confirm to take all possible measures to keep confidential all the confidential materials and information (the “Confidential Information”) they get to know by this Agreement. The Parties shall not disclose, provide or transfer such Confidential Information to any third party without the prior written consent of the other Party. In case of the termination of this Agreement, the receiving party of the Confidential Information shall return or destroy all the files, materials or software as required by the disclosing party, and delete any of the Confidential Information from any memory equipments and discontinue using such Confidential Information.

7.2 The parties agree that this Section 7 shall survive the modification and termination of this Agreement.

8. Notices

Unless a written notice of change of address is issued, all correspondence relating to this Agreement shall be delivered in person, or by registered or prepaid mail, or by recognized express services or facsimile to the addresses appointed by the other party from time to time.

9. Governing Law and Dispute Settlement

9.1 The execution, validity, performance and interpretation of this Agreement shall be governed by and construed in accordance with the laws of the PRC.

9.2 The parties shall strive to settle any dispute arising from the interpretation or performance through friendly consultation. In case no settlement can be reached through consultation, either party may submit such matter to China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration. The arbitration shall follow the then current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese and shall take place in Beijing. The arbitration award shall be final and binding upon the parties. This article shall not be affected by the termination or elimination of this Agreement.

9.3 In case of any disputes arising out of the interpretation and performance of this Agreement or any pending arbitration of such dispute, each party shall continue to perform their obligations under this Agreement, except for the matters in dispute.

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10. Force Majeure

10.1 Force Majeure refers to any accident which is beyond the party’s control and is inevitable with the reasonable care of the other party who shall be influenced, including but not limited to governmental activity, natural force, fire, explosion, storm, flood, earthquake, tide, lightening or war. However, the credit, capital or shortage of financing shall not be deemed as the matters beyond one party’s reasonable control. The Party influenced by the Force Majeure and seeking for exemption hereunder shall notify the other party as soon as possible and inform the other party of the measures to take in order to accomplish the performance of this Agreement.

10.2 In case the performance of this Agreement is delayed or cumbered by the above-referenced Force Majeure, the party who is influenced by the Force Majeure shall not bear any liability within the scope of delay and cumbrance, and shall take all the proper measures to reduce or eliminate the influence of Force Majeure, and shall make efforts to renew the performance of its obligations hereunder which has been delayed or cumbered by the Force Majeure. Each party shall try its best to restore the performance of this Agreement once the Force Majeure is eliminated.

11. Languages and Counterparts

This Agreement is executed in Three (3) sets of originals with each set comprising one English and one Chinese version. 1Verge INTERNET TECHNOLOGY (BEIJING) CO., LTD shall retain 1 set and QIN Qiong and LIU Dele shall retain 2 sets. In the event of any conflict between the 2 language versions, the English version shall prevail.

12. Miscellaneous

12.1 Any modification, termination or waiver of this Agreement shall not take effect without the written consent of each party.

12.2 Any appendix attached hereto shall be of the same effect as this Agreement.

12.3 No Borrower shall transfer its rights and obligations hereunder to any third party without the prior written consent of the Lender.

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12.4 In case any terms and stipulations in this Agreement is regarded as illegal or cannot be performed in accordance with the applicable law, it shall be deemed to be deleted from this Agreement and lose its effect and this Agreement shall remain its effect and be treated as without it from the very beginning. Each party shall replace the deleted stipulations with those lawful and effective ones, which are acceptable to the Lender, through mutual negotiation.

12.5 This Agreement amends and restates all Previous Loan Agreements. In the event of any discrepancy between this Agreement and any Previous Loan Agreement, this Agreement shall prevail to the extent of the discrepant provisions.

[The space below is intentionally left blank.]

Amended and Restated Loan Agreement -9-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)
By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo
BORROWER: QIN QIONG
By:	/s/ Qin Qiong
BORROWER: LIU DELE
By:	/s/ Liu Dele

Amended and Restated Loan Agreement -10-

EX-10.19

Exhibit 10.19

Supplementary Agreement

This Supplementary Agreement (Agreement) is entered into in Beijing, the People’s Republic of China (PRC) on this 16^thday of August 2010, by and between:

1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD., a wholly foreign-owned enterprise established under PRC law, with its registered address at Sections A and C, 5/F, SinoSteel Plaza, No. 8, Haidian Street, Haidian District, Beijing, PRC. (Party A)

and

1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD., a limited liability company duly organized and existing under PRC law, with its registered address at Section D, 5/F, SinoSteel Plaza, No. 8, Haidian Street, Haidian District, Beijing, PRC (Party B).

(Collectively the “Parties” and individually a “Party”)

Whereas:

A. Party A and Party B entered into an Exclusive Technical Consulting and Services Agreement on November 19, 2007, which came into effect retroactively on March 18, 2006 (Service Agreement), pursuant to which Party A agreed to provide Party B with technical and consulting services according to the terms and conditions listed in the Service Agreement. Party B agreed to retain Party A’s services and pay service fees (Service Fees) accordingly.

B. Party A and Party B entered into a Trademark License Agreement on November 19, 2007, which came into effect retroactively on March 18, 2006 (TM License Agreement), pursuant to which Party A agreed to license to Party B certain trademarks according to the terms and conditions listed in the TM License Agreement. Party B agreed to pay license fees to Party A accordingly. Party A and Party B also entered into a Domain Name License Agreement on November 19, 2007, which came into effect retroactively on March 18, 2006 (DN License Agreement), pursuant to which Party A agreed to license to Party B certain domain names according to the terms and conditions listed in the DN License Agreement. Party B agreed to pay license fees to Party A accordingly.

The license fees under the TM License Agreement and the DN License Agreement shall be collectively referred to as License Fees.

Supplementary Agreement - 1 -

C. The Parties and other related parties entered into an Agreement on August 16, 2010 (2010 Agreement), pursuant to which the Parties, together with other related parties, confirm and acknowledge that, among others, the Service Agreement and the License Agreements have continued to be effective, valid and binding upon the Parties after the registered capital of Party B was increased from RMB 10million to RMB 20million in April 2008.

D. By entering into this Agreement, the Parties intend to confirm and acknowledge Party A’s waiver of its right to receive from Party B the Service Fees described in the Service Agreement and License Fees described in the TM License Agreement and DN License Agreement for 2006 to 2009.

(Unless otherwise provided, the terms herein shall have the same meaning as those set forth in the Service Agreement, TM License Agreement or DN License Agreement (where applicable).)

NOW, THEREFORE, the Parties agree as follows:

1. According to: (i) Appendix 2 of the Service Agreement, Party B is entitled to be exempted from paying the Service Fees until Party B is profitable; (ii) Appendix 2 of the TM License Agreement, if Party A (as the Licensor) considers that it would be helpful to the business of Party B (as the Licensee), Party A at its sole discretion may reduce or exempt the whole or any part of the license fee thereunder; and (iii) Appendix 2 of the DN License Agreement, if Party A (as the Licensor) considers that it would be helpful to the business of Party B (as the Licensee), Party A at its sole discretion may reduce or exempt the whole or any part of the license fee thereunder.

2. Party A hereby confirms and acknowledges that it waives its right to receive any and all Service Fees described in the Service Agreement and any License Fees described in the TM License Agreement and DN License Agreement to the extent any such were payable by Party B for the period from 2006 to 2009.

3. This Supplementary Agreement shall be considered an integral part of the Service Agreement, TM License Agreement and DN License Agreement, and this Supplementary Agreement shall have the same effectiveness as the Service Agreement, TM License Agreement and DN License Agreement. Where there is a conflict between this Supplementary Agreement and the Service Agreement, TM License Agreement and/or DN License Agreement, this Supplementary Agreement shall prevail.

4. This Supplementary Agreement has been executed in 2 sets of originals in English, with each Party retaining 1 original copy.

Supplementary Agreement - 2 -

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives on the date first written above.

1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo

1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)
By:	/s/ Qin Qiong
Authorized Representative: QIN Qiong

Supplementary Agreement - 3 -

EX-10.20

Exhibit 10.20

Supplementary Agreement

This Supplementary Agreement (Agreement) is entered into in Beijing, the People’s Republic of China (PRC) on this 16^thday of August 2010, by and between:

1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD., a wholly foreign-owned enterprise established under PRC law, with its registered address at Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China (Party A)

and

JIAHEYI ADVERTISING (BEIJING) CO., LTD., a limited liability company duly organized and existing under PRC law, with its registered address at Section D, 5/F, SinoSteel Plaza, No. 8, Haidian Street, Haidian District, Beijing, PRC (Party B).

(Collectively the “Parties” and individually a “Party”)

Whereas:

A. Party A and Party B entered into an Exclusive Technical Consulting and Services Agreement on November 19, 2007, which came into effect retroactively on March 18, 2006 (Service Agreement), pursuant to which Party A agreed to provide Party B with technical and consulting services according to the terms and conditions listed in the Service Agreement. Party B agreed to retain Party A’s services and pay service fees (Service Fees) accordingly; and

B. By entering into this Agreement, the Parties intend to confirm and acknowledge Party A’s waiver of its right to receive from Party B the Service Fees described in the Service Agreement for 2006 to 2009.

(Unless otherwise provided, the terms herein shall have the same meaning as those set forth in the Service Agreement.)

NOW, THEREFORE, the Parties agree as follows:

1. According to Appendix 2 of the Service Agreement, Party B is entitled to be exempted from paying the Service Fees until Party B is profitable.

2. Party A hereby confirms and acknowledges that it waives its right to receive any and all Service Fees described in the Service Agreement to the extent any such may have been payable by Party B for the period from 2006 to 2009.

3. This Supplementary Agreement shall be considered an integral part of the Service Agreement, and this Supplementary Agreement shall have the same effectiveness as the Service Agreement. Where there is a conflict between this Supplementary Agreement and the Service Agreement, this Supplementary Agreement shall prevail.

Supplementary Agreement - 1 -

4. This Supplementary Agreement has been executed in 2 sets of originals in English, with each Party retaining 1 original copy.

5. Languages and Counterparts

This Supplementary Agreement is executed in Two (2) originals in English and each Party shall retain 1 original.

[The space below is intentionally left blank.]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives on the date first written above.

1 VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo

JIAHEYI ADVERTISING (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Qin Qiong
	Authorized Representative: QIN Qiong

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EX-10.21

Exhibit 10.21

Agreement

This Agreement (this “Agreement”) is entered in Beijing, the People’s Republic of China (“PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for the purposes of this Agreement) and dated August 16, 2010, by and among the following parties:

(1) 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD. (“1Verge Internet”)

Legal Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: Victor Wing Cheung Koo

(2) 1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD. (“Beijing 1Verge Infotech”)

Legal Address: Section A&C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: QIN Qiong

(3) JIAHEYI ADVERTISING (BEIJING) CO., LTD. (“Jiaheyi”)

Legal Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: QIN Qiong

(4) QIN Qiong, a PRC citizen whose PRC identification number is 10108197109214485, and whose residential address is Room 1602, Tower 3, Palm Tree International Apartment, 8 South Chaoyang Park Road, Beijing 100026, PRC

(5) LIU Dele, a PRC citizen whose PRC identification number is 310101196805284437 and whose residential address is, 1701 Tower D, Sunz Garden, 98 Jianguo Road, Beijing , PRC

(QIN Qiong and LIU Dele each hereafter referred to as a “VIE Shareholder”, and collectively “VIE Shareholders”)

(individually a “Party” and collectively the “Parties”)

WHEREAS:

A. QIN Qiong currently holds an 80% equity interest (amounting to RMB 80,000) in Jiaheyi and LIU Dele holds a 20% equity interest (amounting to RMB 20,000) in Jiaheyi.

B. In order for Jiaheyi to subscribe to the increased registered capital of Beijing 1Verge Infotech, the VIE Shareholders agreed to extend loans to Jiaheyi in several instalments in an aggregate amount of RMB 19,000,000 (the “Loans”). For this purpose, the VIE Shareholders requested financial support from 1Verge Internet. 1Verge Internet agreed to provide financial support to facilitate the VIE Shareholders’ extension of Loans to Jiaheyi.

Agreement - 1 -

C. As a result, (i) 1Verge Internet extended RMB 9,000,000 to the VIE Shareholders, who in turn extended the same to Jiaheyi (“2006 Loans”); Jiaheyi applied that RMB 9,000,000 to its subscription to the increased registered capital of Beijing 1Verge Infotech in July 2006, after which the registered capital of Beijing 1Verge Infotech was increased to RMB 10,000,000, in which Jiaheyi held a 90% equity interest (amounting to RMB 9,000,000), QIN Qiong held an 8% equity interest (amounting to RMB 800,000) and LIU Dele held a 2% equity interest (amounting to RMB 200,000); and (ii) 1Verge Internet further extended RMB 10,000,000 to the VIE Shareholders, who in turn extended the same to Jiaheyi (“2008 Loans”); Jiaheyi applied that RMB 10,000,000 to its subscription to the increased registered capital of Beijing 1Verge Infotech in April 2008 (“2008 Capital Increase”), after which the registered capital of Beijing 1Verge Infotech was increased to RMB 20,000,000, in which Jiaheyi held a 95% equity interest (amounting to RMB 19,000,000), QIN Qiong held a 4% equity interest (amounting to RMB 800,000) and LIU Dele held a 1% equity interest (amounting to RMB 200,000).

D. In consideration of 1Verge Internet and the VIE Shareholders’ support in assisting Jiaheyi to subscribe to the increased registered capital of Beijing 1Verge Infotech by providing the 2006 Loans, Jiaheyi concluded a series of agreements with 1Verge Internet and the VIE Shareholders in November 2007 (“Jiaheyi VIE Agreements”), which are listed in Schedule 1A. Pursuant to the Jiaheyi VIE Agreements, Jiaheyi, as a 90% shareholder of Beijing 1Verge Infotech, agreed not to, among others, transfer or otherwise dispose of the equity interests it held in Beijing 1Verge Infotech without the prior written consent of 1Verge Internet and the VIE Shareholders.

E. On [May 19,2010], 1Verge Internet and the VIE Shareholders procured that Jiaheyi transfer its 95% equity interest (amounting to RMB 19,000,000) to the VIE Shareholders, for consideration of [RMB 19,000,000] (“Equity Transfer”). After this Equity Transfer, QIN Qiong holds an 80% equity interest (amounting to RMB 16,000,000) in Beijing 1Verge Infotech and LIU Dele holds a 20% equity interest (amounting to RMB 4,000,000).

F. In addition to the Jiaheyi VIE Agreements, the Parties also concluded a series of other documents (as listed in Schedule 1B), which, combined with the Jiaheyi VIE Agreements, allowed 1Verge Internet to exert a certain level of control over, and to receive certain payments from, Beijing 1Verge Infotech and the VIE Shareholders. The documents listed in Schedules 1A and 1B shall be referred to hereafter as the “2007 ICPCo VIE Documents”.

Agreement - 2 -

THEREFORE, the Parties, through friendly negotiation based on principles of equal and mutual benefit, agree as follows:

1. 2007 ICPCo VIE Documents and 2008 Capital Increase

The Parties hereby confirm and acknowledge that:

1.1 The 2007 ICPCo VIE Documents remained effective, valid and binding upon the Parties thereunder after the completion of the 2008 Capital Increase, and no substantive amendments have been made to the 2007 ICPCo VIE Documents.

1.2 Immediately after the completion of the 2008 Capital Increase and until the completion of the Equity Transfer, all references to the equity holding percentage in and the amount of capital contribution made by a shareholder into the registered capital of Beijing 1Verge Infotech as stipulated under the 2007 ICPCo VIE Documents should be deemed and understood as having been adjusted, updated and interpreted as:

(i) QIN Qiong: 4% equity interest (amounting to RMB 800,000) in Beijing 1Verge Infotech;

(ii) LIU Dele: 1% equity interest (amounting to RMB 200,000) in Beijing 1Verge Infotech; and

(iii) Jiaheyi: 95% equity interest (amounting to RMB 19,200,000) in Beijing 1Verge Infotech.

1.3 The Parties have strictly complied with and implemented the 2007 ICPCo VIE Documents after the 2008 Capital Increase, and all rights, interests, titles, obligations, responsibilities and restrictions arising from, in connection with or relating to the equity interest of Beijing 1Verge Infotech, which should be held or assumed by the shareholders of Beijing 1Verge Infotech as stipulated under the 2007 ICPCo VIE Documents should be deemed and understood as (i) having been extended to cover the RMB 10,000,000 increased registered capital of Beijing 1Verge Infotech subscribed by Jiaheyi, and (ii) having been adjusted and updated to reflect the new equity interest percentages and the amounts of capital contribution of the shareholders of Beijing 1Verge Infotech as a result of the 2008 Capital Increase.

2. Acknowledgement and Authorization of the Equity Transfer

1Verge Internet and the VIE Shareholders hereby confirm and acknowledge that the Equity Transfer fully complied with the Jiaheyi VIE Agreements and has been duly authorized and acknowledged by 1Verge Internet and the VIE Shareholders.

Agreement - 3 -

3. Assignment of Contractual Rights and Obligations / Responsibilities

Notwithstanding any provisions herein or in the Jiaheyi VIE Agreements, the Parties hereby confirm and acknowledge that:

3.1 All rights that Jiaheyi shall enjoy and obligations that is shall assume under the Jiaheyi VIE Agreements shall be duly and fully transferred to the VIE Shareholders upon the completion of the Equity Transfer, including without limitation Jiaheyi’s obligation to repay the Loans to the VIE Shareholders in accordance with and in a manner as stipulated under the Jiaheyi VIE Agreements, and the power and authority to designate and authorize a person designated by 1Verge Internet to vote on Jiaheyi’s behalf at the shareholders' meetings of Beijing 1Verge Infotech and exercise the full voting rights as Beijing 1Verge Infotech’s shareholder as granted to Jiaheyi by law and under the Articles of Association of Beijing 1Verge Infotech.

3.2 Upon the completion of the Equity Transfer and once Jiaheyi is no longer a registered shareholder of Beijing 1Verge Infotech, Jiaheyi shall not enjoy any rights, nor shall it assume any obligations or responsibilities, under or arising from the Jiaheyi VIE Agreements.

3.3 Nothing in this Agreement shall be construed as an exemption of Jiaheyi from its obligations or responsibilities as a result of its breach of the Jiaheyi VIE Agreements before the completion of the Equity Transfer.

3.4 All Jiaheyi VIE Agreements to which Jiaheyi is party shall be amended and restated in form and substance satisfactory to 1Verge Internet.

3.5 All powers of attorney issued by Jiaheyi in its capacity as a registered shareholder of Beijing 1Verge Infotech according to the Jiaheyi VIE Agreements are hereby revoked, nullified and invalidated.

4. Taxes and Expenses

Any taxes, expenses or costs that will be incurred by or be applicable to Jiaheyi and/or the VIE Shareholders in connection with, relating to or arising from the Equity Transfer or the assignment of the contractual rights and obligations / responsibilities set forth in Section 2 hereunder shall be solely borne by 1Verge Internet.

5. No Assignment

Neither Party shall assign any of its rights or obligations hereunder without the prior written consent of the other Parties, except that 1Verge Internet may at its discretion assign its rights and obligations under this Agreement to its affiliates or subsidiaries.

Agreement - 4 -

6. Effectiveness

This Agreement will be effective upon its being signed by the Parties hereunder, notwithstanding that the assignment of the contractual rights and obligations / responsibilities set forth in Section 2 hereunder shall be effective retroactively as of the date of the completion of the Equity Transfer.

7. Governing Law and Dispute Resolution

7.1 This Agreement shall be governed by and construed in accordance with the laws of the PRC.

7.2 If any dispute in connection with this Agreement arises, the Parties shall attempt in the first instance to resolve such dispute through friendly consultation or mediation.

7.3 In case no settlement can be reached through friendly consultation, either Party may submit such matter to the China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration in accordance with the then current rules of CIETAC. The arbitration proceedings shall take place in Beijing and shall be conducted in Chinese. The arbitration award shall be final and binding upon all the Parties. This article shall not be influenced by the termination or elimination of this Agreement.

8. Languages and Counterparts

This Agreement is executed in Five (5) originals in English and each Party shall retain 1 original.

[The space below is intentionally left blank.]

Agreement - 5 -

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Victor Wing Cheung Koo
Authorized Representative: Victor Wing Cheung Koo

1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Qin Qiong
Authorized Representative: QIN Qiong

JIAHEYI ADVERTISING (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Qin Qiong
Authorized Representative: QIN Qiong
QIN QIONG
By:	/s/ Qin Qiong
LIU DELE
By:	/s/ Liu Dele

Agreement

[Schedule 1]

2007 ICPCo VIE Documents

Schedule 1A

List of Jiaheyi VIE Agreements

1. Loan Agreement among QIN Qiong, LIU Dele and Jiaheyi, dated November 19, 2007;

2. Equity Interest Pledge Agreement among QIN Qiong, LIU Dele, Jiaheyi and 1Verge Internet, dated November 19, 2007;

3. Share Option Agreement among QIN Qiong, LIU Dele, Jiaheyi and 1Verge Internet, dated November 19, 2007;

4. Business Operations Agreement among QIN Qiong, LIU Dele, Jiaheyi, 1Verge Internet and Beijing 1Verge Infotech, dated November 19, 2007; and

5. Power of Attorney issued by Jiaheyi in favour of Mr. Victor Wing Cheung Koo, dated August 2, 2006.

Schedule 1B

6. Trademark License Agreement between 1Verge Internet and Beijing 1Verge Infotech, dated November 19, 2007;

7. Domain Name License Agreement between 1Verge Internet and Beijing 1Verge Infotech, dated November 19, 2007;

8. Exclusive Technical and Consulting Services Agreement between 1Verge Internet and Beijing 1Verge Infotech, dated November 19, 2007;

9. Loan Agreement among QIN Qiong, LIU Dele and 1Verge Internet, dated November 19, 2007;

10. 2 Powers of Attorney issued by QIN Qiong and LIU Dele, respectively, in favour of Mr. Victor Wing Cheung Koo, dated November 19, 2007.

Agreement - 7 -

EX-10.22

Exhibit 10.22

Agreement

This Agreement (this “Agreement”) is entered in Beijing, the People’s Republic of China (“PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for the purposes of this Agreement) and dated August 16, 2010, by and among the following parties:

(1) 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD. (“1Verge Internet”)

Legal Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: Victor Wing Cheung Koo

(2) 1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD. (“Beijing 1Verge Infotech”)

Legal Address: Section A&C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: QIN Qiong

(3) JIAHEYI ADVERTISING (BEIJING) CO., LTD. (“Jiaheyi”)

Legal Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: QIN Qiong

(4) QIN Qiong, a PRC citizen whose PRC identification number is 10108197109214485, and whose residential address is Room 1602, Tower 3, Palm Tree International Apartment, 8 South Chaoyang Park Road, Beijing 100026, PRC

(5) LIU Dele, a PRC citizen whose PRC identification number is 310101196805284437 and whose residential address is, 1701 Tower D, Sunz Garden, 98 Jianguo Road, Beijing , PRC

(QIN Qiong and LIU Dele each hereafter referred to as a “VIE Shareholder”, and collectively “VIE Shareholders”)

(individually a “Party” and collectively the “Parties”)

WHEREAS:

A. QIN Qiong currently holds an 80% equity interest (amounting to RMB 80,000) in Jiaheyi and LIU Dele holds a 20% equity interest (amounting to RMB 20,000) in Jiaheyi.

B. In order for Jiaheyi to subscribe to the increased registered capital of Beijing 1Verge Infotech, the VIE Shareholders agreed to extend loans to Jiaheyi in several instalments in an aggregate amount of RMB 19,000,000 (the “Loans”). For this purpose, VIE Shareholders requested financial supports from 1Verge Internet. 1Verge Internet agreed to provide financial support to facilitate the VIE Shareholders’ extension of Loans to Jiaheyi.

Agreement - 1 -

C. As a result, 1Verge Internet extended the principal amount of the Loans in several instalments to the VIE Shareholders, who in turn extended the principal amount of the Loans to Jiaheyi. Jiaheyi has applied all such Loans to subscribe to the increased registered capital of Beijing 1Verge Infotech. After this capital increase, the registered capital of Beijing 1Verge Infotech has been increased to RMB 20,000,000, in which Jiaheyi held a 95% equity interest (amounting to RMB 19,000,000), QIN Qiong held a 4% equity interest (amounting to RMB 800,000) and LIU Dele held a 1% equity interest (amounting to RMB 200,000).

D. In consideration of 1Verge Internet and the VIE Shareholders’s support in assisting Jiaheyi to subscribe to the increased registered capital of Beijing 1Verge Infotech, Jiaheyi concluded a series of agreements with 1Verge Internet and the VIE Shareholders, a list of which is appended hereto as Appendix 1 (“Jiaheyi VIE Agreements”). Pursuant to the Jiaheyi VIE Agreements, Jiaheyi, as a 95% shareholder of Beijing 1Verge Infotech, agreed not to, among others, transfer or otherwise dispose of the equity interests it held in Beijing 1Verge Infotech without the prior written consent of 1Verge Internet and the VIE Shareholders.

E. On May 19, 2010 1Verge Internet and the VIE Shareholders procured that Jiaheyi transfer its 95% equity interest (amounting to RMB 19,000,000) to the VIE Shareholders, for consideration of [RMB 19,000,000] (“Equity Transfer”). After this Equity Transfer, QIN Qiong holds an 80% equity interest (amounting to RMB 16,000,000) in Beijing 1Verge Infotech and LIU Dele holds a 20% equity interest (amounting to RMB 4,000,000).

THEREFORE, the Parties, through friendly negotiation based on principles of equal and mutual benefit, agree as follows:

1. Acknowledgement and Authorization of the Equity Transfer

1Verge Internet and the VIE Shareholders hereby confirm and acknowledge that the Equity Transfer fully complied with the Jiaheyi VIE Agreements and has been duly authorized and acknowledged by 1Verge Internet and the VIE Shareholders.

2. Assignment of Contractual Rights and Obligations / Responsibilities

Notwithstanding any provisions herein or in the Jiaheyi VIE Agreements, the Parties hereby confirm and acknowledge that:

2.1 All rights that Jiaheyi shall enjoy and obligations that is shall assume under the Jiaheyi VIE Agreements shall be duly and fully transferred to the VIE Shareholders upon the completion of the Equity Transfer, including without limitation Jiaheyi’s obligation to repay the Loans to the VIE Shareholders in accordance with and in a manner as stipulated under the Jiaheyi VIE Agreements, and the power and authority to designate and authorize a person designated by 1Verge Internet to vote on Jiaheyi’s behalf at the shareholders' meetings of Beijing 1Verge Infotech and exercise the full voting rights as Beijing 1Verge Infotech’s shareholder as granted to Jiaheyi by law and under the Articles of Association of Beijing 1Verge Infotech.

Agreement - 2 -

2.2 Upon the completion of the Equity Transfer and once Jiaheyi is no longer a registered shareholder of Beijing 1Verge Infotech, Jiaheyi shall not enjoy any rights, nor shall it assume any obligations or responsibilities, under or arising from the Jiaheyi VIE Agreements.

2.3 Nothing in this Agreement shall be construed as an exemption of Jiaheyi from its obligations or responsibilities as a result of its breach of the Jiaheyi VIE Agreements before the completion of the Equity Transfer.

2.4 All Jiaheyi VIE Agreements to which Jiaheyi is party shall be amended and restated in form and substance satisfactory to 1Verge Internet.

2.5 All powers of attorney issued by Jiaheyi in its capacity as a registered shareholder of Beijing 1Verge Infotech according to the Jiaheyi VIE Agreements are hereby revoked, nullified and invalidated.

3. Taxes and Expenses

Any taxes, expenses or costs that will be incurred by or be applicable to Jiaheyi and/or the VIE Shareholders in connection with, relating to or arising from the Equity Transfer or the assignment of the contractual rights and obligations / responsibilities set forth in Section 2 hereunder shall be solely borne by 1Verge Internet.

4. No Assignment

Neither Party shall assign any of its rights or obligations hereunder without the prior written consent of the other Parties, except that 1Verge Internet may at its discretion assign its rights and obligations under this Agreement to its affiliates or subsidiaries.

5. Effectiveness

This Agreement will be effective upon its being signed by the Parties hereunder, notwithstanding that the Assignment of the Contractual Rights and Obligations / Responsibilities in Section 2 shall be effective retroactively as of the date of the completion of the Equity Transfer.

Agreement - 3 -

6. Governing Law and Dispute Resolution

6.1 This Agreement shall be governed by and construed in accordance with the laws of the PRC.

6.2 If any dispute in connection with this Agreement arises, the Parties shall attempt in the first instance to resolve such dispute through friendly consultation or mediation.

6.3 In case no settlement can be reached through friendly consultation, either Party may submit such matter to the China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration in accordance with the then current rules of CIETAC. The arbitration proceedings shall take place in Beijing and shall be conducted in Chinese. The arbitration award shall be final and binding upon all the Parties. This article shall not be influenced by the termination or elimination of this Agreement.

7. Languages and Counterparts

This Agreement is executed in Five (5) originals in English and each Party shall retain 1 original.

[The space below is intentionally left blank.]

Agreement - 4 -

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Victor Koo
Authorized Representative: Victor KOO

1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Qin Qiong
Authorized Representative: QIN Qiong

JIAHEYI ADVERTISING (BEIJING) CO., LTD.

(Company Seal)

By:	/s/ Qin Qiong
Authorized Representative: QIN Qiong

QIN QIONG

By: /s/ Qin Qiong

LIU DELE

By: /s/ Liu Dele

Agreement

[Appendix 1]

List of Jiaheyi VIE Agreements

1. Loan Agreement among QIN Qiong, LIU Dele and Jiaheyi, dated November 19, 2007;

2. Equity Interest Pledge Agreement among QIN Qiong, LIU Dele, Jiaheyi and 1Verge Internet, dated November 19, 2007;

3. Share Option Agreement among QIN Qiong, LIU Dele, Jiaheyi and 1Verge Internet, dated November 19, 2007;

4. Business Operations Agreement among QIN Qiong, LIU Dele, Jiaheyi and 1Verge Internet, dated November 19, 2007; and

5. 2 Powers of Attorney issued by Jiaheyi in favour of Mr. Victor KOO in March 2006 and November 2007, respectively.

Agreement - 6 -

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF THE REGISTRANT

	Place of Incorporation
Subsidiaries
1Verge Internet Technology (Beijing) Co., Ltd.	PRC
Jet Brilliant Limited	Hong Kong
Beijing Jet Brilliant Advertising Co., Ltd.	PRC
Variable Interest Entities
1Verge Information Technology (Beijing) Co., Ltd.	PRC
JiaHeYi Advertising (Beijing) Co., Ltd.	PRC

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EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated August 20, 2010, in the Registration Statement (Form F-1) and related Prospectus of Youku.com Inc. for the registration of its ordinary shares.

/s/ Ernst & Young Hua Ming

Beijing, People’s Republic of China

November 15, 2010

EX-23.4

Exhibit 23.4

November 15, 2010

Youku.com Inc.

5/F, SinoSteel Plaza, 8 Haidian Street

Haidian District, Beijing 100080

The People’s Republic of China

Ladies and Gentlemen,

We consent to the reference to our firm under the headings “Risk Factors”, “Enforceability of Civil Liabilities,” “Corporate Structure”,” Regulation,” and “Legal Matters” in the prospectus included in Youku.com Inc.’s registration statement on Form F-1, which is filed with the Securities and Exchange Commission on November 15, 2010 under the U.S. Securities Act of 1933, as amended.

Yours faithfully,

/s/ TransAsia Lawyers

TransAsia Lawyers

EX-23.5

Exhibit 23.5

November 15, 2010

Board of Directors

Youku.com Inc.

5/F, Sinosteel Plaza,

8 Haidian Street, Haidian District,

Beijing 100080, People’s Republic of China

Subject:        WRITTEN CONSENT OF AMERICAN APPRAISAL CHINA LIMITED

We hereby consent to the references to our name and our final appraisal reports addressed to the board of directors of Youku.com Inc. (“Youku” or the “Company”), and to references to our valuation methodologies, assumptions and conclusions associated with such reports, in the registration statement on Form F-1 of the Company and any amendments thereto (the “Registration Statement”) filed or to be filed with the U.S. Securities and Exchange Commission (the “SEC”). We further consent to the filing of this letter as an exhibit to the Registration Statement.

In reaching our value conclusions, we relied on the accuracy and completeness of the financial statements and other data provided by the Company and its representatives. We did not audit or independently verify such financial statements or other data and take no responsibility for the accuracy of such information. The Company determined the fair values and our valuation reports were used to assist the Company in reaching its determinations.

In giving such consent, we do not hereby admit that we come within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the rules and regulations adopted by the SEC (the “Act”), nor do we admit that we are experts with respect to any part of such Registration Statement within the meaning of the term “experts” as used in the Act.

Yours faithfully,

/s/ American Appraisal China Limited

AMERICAN APPRAISAL CHINA LIMITED

EX-99.1

Exhibit 99.1

Youku.com Inc.

Code of Business Conduct and Ethics

Purpose

This Code of Business Conduct and Ethics (the “Code”) contains general guidelines for conducting the business of Youku.com Inc. (as “Company”) consistent with the highest standards of business ethics, and is intended to qualify as a “code of ethics” within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder. To the extent this Code requires a higher standard than required by commercial practice or applicable laws, rules or regulations, we adhere to these higher standards.

This Code is designed to deter wrongdoing and to promote:

• honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

• full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with, or submits to, the U.S. Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company;

• compliance with applicable laws, rules and regulations;

• prompt internal reporting of violations of the Code; and

• accountability for adherence to the Code.

Applicability

This Code applies to all of the directors, officers and employees of the Company and its subsidiaries, whether they work for the Company on a full-time, part-time, consultative, or temporary basis (each an “employee” and collectively, the “employees”). In addition, the Company expects those who do business for us such as consultants and collaborators to also adhere to the principles outlined in the Code. Certain provisions of the Code apply specifically to our chief executive officer, chief financial officer, senior finance officer, controller, vice presidents and any other persons who perform similar functions for the Company (each, a “senior officer,” and collectively, “senior officers”).

The Board of Directors of the Company (the “Board”) has appointed Mr.             , the Company’s             , as the Compliance Officer for the Company. If you have any questions regarding the Code or would like to report any violation of the Code, please call the Compliance Officer at              or e-mail him at             .

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This Code was adopted by the Board on             , 2010. The Code shall become effective (the “Effective Time”) upon the effectiveness of the Company’s registration statement on Form F-1 filed with the SEC relating to the Company’s initial public offering (the “IPO”).

Conflicts of Interest

Identifying Conflicts of Interest

A conflict of interest occurs when an employee’s private interest interferes, or appears to interfere, in any way with the interests of the Company as a whole. You should actively avoid any private interest that may influence your ability to act in the interests of the Company or that may make it difficult to perform your work objectively and effectively. In general, the following should be considered conflicts of interest:

• Competing Business. No employee may be employed by a business that competes with the Company or deprives it of any business.

• Corporate Opportunity. No employee should use corporate property, information or his or her position with the Company to secure a business opportunity that would otherwise be available to the Company. If you discover a business opportunity that is in the Company’s line of business, through the use of the Company’s property, information or position, you must first present the business opportunity to the Company before pursuing the opportunity in your individual capacity.

• Financial Interests.

(i) No employee may have any financial interest (ownership or otherwise), either directly or indirectly through a spouse or other family member, in any other business or entity if such interest adversely affects the employee’s performance of duties or responsibilities to the Company, or requires the employee to devote certain time during such employee’s working hours at the Company;

(ii) No employee may hold any ownership interest in a privately-held company that is in competition with the Company;

(iii) An employee may hold up to but no more than 5% ownership interest in a publicly traded company that is in competition with the Company; provided that if the employee’s ownership interest in such publicly traded company increases to more than 5%, the employee must immediately report such ownership to the Compliance Officer;

(iv) No employee may hold any ownership interest in a company that has a business relationship with the Company if such employee’s duties at the Company include managing or supervising the Company’s business relations with that company; and

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(v) Notwithstanding other provisions of this Code,

(a) a director or an immediate family member of such director (collectively for the director and her/his family member(s), “Director Affiliates”) or a senior officer or an immediate family member of such senior officer (collectively for the senior officer and her/his family member(s), “Officer Affiliates”) may continue to hold his/her/its investment or other financial interest in a business or entity (an “Interested Business”) that:

(1) was made or obtained either (x) before the Company invested in or otherwise became interested in such business or entity; or (y) before the director or senior officer joined the Company (for the avoidance of doubt, regardless of whether the Company had or had not already invested in or otherwise become interested in such business or entity at the time the director or senior officer joined the Company); or

(2) may in the future be made or obtained by the director or senior officer, provided that at the time such investment or other financial interest is made or obtained, the Company has not yet invested in or otherwise become interested in such business or entity;

provided that such director or senior officer shall disclose such investment or other financial interest to the Board;

(b) an interested director or senior officer shall refrain from participating in any discussion among senior officers of the Company relating to an Interested Business and shall not be involved in any proposed transaction between the Company and an Interested Business; and

(c) if any Director Affiliate or Officer Affiliate (i) invests, or otherwise acquires any equity or other financial interest, in a business or entity that is in competition with the Company, and such investment or acquisition is material, or (ii) enters into any material transaction with the Company that could reasonably be perceived as a conflict of interest, the related director or senior officer shall report it to the Audit Committee of the Board either before or as soon as practicable after such investment, acquisition or transaction.

For purposes of this Code, a company or entity is deemed to be “in competition with the Company” if it competes with the Company’s business of providing online video and advertising services and/or any other business in which the Company is engaged.

• Loans or Other Financial Transactions. No employee may obtain loans or guarantees of personal obligations from, or enter into any other personal financial transaction with, any company that is a material customer or competitor of the Company. This guideline does not prohibit arms-length transactions with recognized banks or other financial institutions.

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• Service on Boards and Committees. No employee should serve on a board of directors or trustees or on a committee of any entity (whether profit or not-for-profit) whose interests reasonably could be expected to conflict with those of the Company. Employees must obtain prior approval from the Board before accepting any such board or committee position. The Company may revisit its approval of any such position at any time to determine whether service in such position is still appropriate.

It is difficult to list all of the ways in which a conflict of interest may arise, and we have provided only a few, limited examples. If you are faced with a difficult business decision that is not addressed above, ask yourself the following questions:

• Is it legal?

• Is it honest and fair?

• Is it in the best interests of the Company?

Disclosure of Conflicts of Interest

The Company requires that employees fully disclose any situations that reasonably could be expected to give rise to a conflict of interest. If you suspect that you have a conflict of interest, or something that others could reasonably perceive as a conflict of interest, you must report it immediately to the Compliance Officer. Conflicts of interest may only be waived by the Board, or the appropriate committee of the Board, and will be promptly disclosed to the public to the extent required by law.

Family Members and Work

The actions of family members outside the workplace may also give rise to conflicts of interest because they may influence an employee’s objectivity in making decisions on behalf of the Company. If a member of an employee’s family is interested in doing business with the Company, the criteria as to whether to enter into or continue the business relationship, and the terms and conditions of the relationship, must be no less favorable to the Company compared with those that would apply to a non-relative seeking to do business with the Company under similar circumstances.

Employees should report any situation involving family members that could reasonably be expected to give rise to a conflict of interest to their supervisor or the Compliance Officer. For purposes of this Code, “family members” or “members of your family” include your spouse, brothers, sisters and parents, in-laws and children.

Gifts and Entertainment

The giving and receiving of gifts is common business practice. Appropriate business gifts and entertainment are welcome courtesies designed to build relationships and understanding among business partners. However, gifts and entertainment should never compromise, or appear to compromise, your ability to make objective and fair business decisions.

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It is the responsibility of employees to use good judgment in this area. As a general rule, employees or family members of employees may give or receive gifts or entertainment to or from customers or suppliers only if the gift or entertainment could not be viewed as an inducement to any particular business decision. All gifts and entertainment expenses made on behalf of the Company must be properly accounted for on expense reports.

Employees may only accept appropriate gifts. We encourage employees to submit gifts received to the Company. While it is not mandatory to submit small gifts, gifts of over RMB200 must be submitted immediately to the administration department of the Company.

The Company’s business conduct is founded on the principle of “fair transaction.” Therefore, no employee may offer, give, solicit or receive any form of kickbacks, bribe, commissions or any other personal benefits.

FCPA Compliance

The U.S. Foreign Corrupt Practices Act (“FCPA”) prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. A violation of FCPA not only violates the Company’s policy but is also a civil or criminal offense under FCPA which the Company is subject to after the Effective Time. No employee shall give or authorize directly or indirectly any illegal payments to government officials of any country. While the FCPA does, in certain limited circumstances, allow nominal “facilitating payments” to be made, any such payment must be discussed with and approved by your supervisor in advance before it can be made. If there is any questions as to whether such payment is a nominal facilitating payment, you should seek guidance from the Compliance Officer.

Protection and Use of Company Assets

Employees should protect the Company’s assets and ensure their efficient use for legitimate business purposes only. Theft, carelessness and waste have a direct impact on the Company’s profitability. The use of the funds or assets of the Company, whether for personal gain or not, for any unlawful or improper purpose is strictly prohibited.

To ensure the protection and proper use of the Company’s assets, each employee should:

• Exercise reasonable care to prevent theft, damage or misuse of Company property;

• Promptly report the actual or suspected theft, damage or misuse of Company property;

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• Safeguard all electronic programs, data, communications and written materials from inadvertent access by others; and

• Use Company property only for legitimate business purposes.

Except as approved in advance by the Chief Executive Officer, Chief Operating Officer or Chief Financial Officer of the Company, the Company prohibits political contributions (directly or through trade associations) by any employee on behalf of the Company. Prohibited political contribution activities include:

• any contributions of Company funds or other assets for political purposes;

• encouraging individual employees to make any such contribution; and

• reimbursing an employee for any political contribution.

Intellectual Property and Confidentiality

• All inventions, creative works, computer software, and technical or trade secrets developed by an employee in the course of performing the employee’s duties or primarily through the use of the Company’s materials and technical resources while working at the Company, shall be the property of the Company.

• The Company maintains a strict confidentiality policy. During an employee’s term of employment, the employee shall comply with any and all written or unwritten rules and policies concerning confidentiality and shall fulfill the their duties and responsibilities concerning confidentiality applicable to the employee.

• In addition to fulfilling the responsibilities associated with his position in the Company, an employee shall not, without first obtaining approval from the Company, disclose, announce or publish trade secrets or other confidential business information of the Company, nor shall an employee use such confidential information outside the course of his duties to the Company.

• Even outside the work environment, an employee must maintain vigilance and refrain from disclosing important information regarding the Company or its business, customers or employees.

• An employee’s duty of confidentiality with respect to the confidential information of the Company survives the termination of such employee’s employment with the Company for any reason until such time as the Company discloses such information publicly or the information otherwise becomes available in the public sphere through no fault of the employee.

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• Upon termination of employment, or at such time as the Company requests, an employee must return to the Company all of its property without exception, including all forms of medium containing confidential information, and may not retain duplicate materials.

Accuracy of Financial Reports and Other Public Communications

Upon the completion of the IPO, the Company will be required to report its financial results and other material information about its business to the public and the SEC. It is the Company’s policy to promptly disclose accurate and complete information regarding its business, financial condition and results of operations. Employees must strictly comply with all applicable standards, laws, regulations and policies for accounting and financial reporting of transactions, estimates and forecasts. Inaccurate, incomplete or untimely reporting will not be tolerated and can severely damage the Company and result in legal liability.

Employees should be on guard for, and promptly report, any possibility of inaccurate or incomplete financial reporting. Particular attention should be paid to:

• Financial results that seem inconsistent with the performance of the underlying business;

• Transactions that do not seem to have an obvious business purpose; and

• Requests to circumvent ordinary review and approval procedures.

The Company’s senior financial officers and other employees working in the Finance Department have a special responsibility to ensure that all of the Company’s financial disclosures are full, fair, accurate, timely and understandable. Any practice or situation that might undermine this objective should be reported to the Compliance Officer.

Employees are prohibited from directly or indirectly taking any action to coerce, manipulate, mislead or fraudulently influence the Company’s independent auditors for the purpose of rendering the financial statements of the Company materially misleading. Prohibited actions include but are not limited to those actions taken to coerce, manipulate, mislead or fraudulently influence an auditor:

• to issue or reissue a report on the Company’s financial statements that is not warranted in the circumstances (due to material violations of U.S. GAAP, generally accepted auditing standards or other professional or regulatory standards);

• not to perform audit, review or other procedures required by generally accepted auditing standards or other professional standards;

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• not to withdraw an issued report; or

• not to communicate matters to the Company’s Audit Committee.

Company Records

Accurate and reliable records are crucial to the Company’s business and form the basis of its earnings statements, financial reports and other disclosures to the public. The Company’s records are the source of essential data that guides business decision-making and strategic planning. Company records include, but are not limited to, booking information, payroll, timecards, travel and expense reports, e-mails, accounting and financial data, measurement and performance records, electronic data files and all other records maintained in the ordinary course of our business.

All Company records must be complete, accurate and reliable in all material respects. There is never an acceptable reason to make false or misleading entries. Undisclosed or unrecorded funds, payments or receipts are strictly prohibited. You are responsible for understanding and complying with the Company’s record keeping policy. Contact the Compliance Officer if you have any questions regarding the record keeping policy.

Compliance with Laws and Regulations

Each employee has an obligation to comply with the laws of the cities, provinces, regions and countries in which the Company operates. This includes, without limitation, laws covering commercial bribery and kickbacks, copyrights, trademarks and trade secrets, information privacy, insider trading, offering or receiving gratuities, employment harassment, environmental protection, occupational health and safety, false or misleading financial information, misuse of corporate assets and foreign currency exchange activities. Employees are expected to understand and comply with all laws, rules and regulations that apply to your position at the Company. If any doubt exists about whether a course of action is lawful, you should seek advice immediately from the Compliance Officer. If you become aware of the violation of any law, rule or regulation by the Company, its employees or any third parties doing business on behalf of the Company, you must report the matter to your supervisor or the Compliance Officer.

Discrimination and Harassment

The Company is firmly committed to providing equal opportunity in all aspects of employment and will not tolerate any illegal discrimination or harassment based on race, ethnicity, religion, gender, age, national origin or any other protected class. For further information, you should consult the Compliance Officer.

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Health and Safety

The Company strives to provide employees with a safe and healthy work environment. Each employee has responsibility for maintaining a safe and healthy workplace for other employees by following environmental, safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions. Violence and threatening behavior are not permitted.

Each employee is expected to perform his or her duty to the Company in a safe manner, free of the influences of alcohol, illegal drugs or other controlled substances. The use of illegal drugs or other controlled substances in the workplace is prohibited.

Violations of the Code

All employees have a duty to report any known or suspected violation of this Code, including any violation of laws, rules, regulations or policies that apply to the Company. Reporting a known or suspected violation of this Code by others will not be considered an act of disloyalty, but an action to safeguard the reputation and integrity of the Company and its employees.

If you know of or suspect a violation of this Code, it is your responsibility to immediately report the violation to the Compliance Officer, who will work with you to investigate your concern. All questions and reports of known or suspected violations of this Code will be treated with sensitivity and discretion. The Compliance Officer and the Company will protect your confidentiality to the extent possible, consistent with the law and the Company’s need to investigate your concern.

It is the Company’s policy that any employee who violates this Code will be subject to appropriate discipline, including termination of employment, based upon the facts and circumstances of each particular situation. Your conduct as an employee of the Company, if it does not comply with the law or with this Code, can result in serious consequences for both you and the Company.

The Company strictly prohibits retaliation against an employee who, in good faith, seeks help or reports known or suspected violations. An employee inflicting reprisal or retaliation against another employee for reporting a known or suspected violation, will be subject to disciplinary action up to and including termination of employment.

Waivers of the Code

Waivers of this Code will be granted on a case-by-case basis and only in extraordinary circumstances. Waivers of this Code may be made only by the Board, or the appropriate committee of the Board, and will be disclosed as required by applicable laws or stock exchange regulations.

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Conclusion

This Code contains general guidelines for conducting the business of the Company consistent with the highest standards of business ethics. If you have any questions about these guidelines, please contact the Compliance Officer. We expect all employees to adhere to these standards. Each employee is separately responsible for his or her actions. Conduct that violates the law or this Code cannot be justified by claiming that it was ordered by a supervisor or someone in higher management. If you engage in conduct prohibited by the law or this Code, you will be deemed to have acted outside the scope of your employment. Such conduct will subject you to disciplinary action, including termination of employment.

Each subsidiary and affiliate of the Company shall prepare comprehensive and concrete rules to implement this Code based on its own situations and needs.

* * * * * * * * * * * * *

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EX-99.2

Exhibit 99.2

Form of TransAsia Lawyers PRC Legal Opinion

I. Definitions

The following terms as used in this Opinion are defined as follows:

“1Verge Information”	means 1Verge Information Technology (Beijing) Co., Ltd., a company incorporated under the PRC Laws.
“1Verge Internet”	means 1Verge Internet Technology (Beijing) Co., Ltd., a company incorporated under the PRC Laws and of which 100% equity interest is directly owned by the Company.
“Group Companies”	means the Company, Jet Brilliant Hong Kong, and the PRC Companies.
“Government Agency”	means any national, provincial, municipal or local governmental authority, agency or body having jurisdiction over any of the PRC Companies in the PRC.
“Governmental Authorization”	means all consents, approvals, authorizations, permissions, orders, registrations, filings, licenses, clearances and qualifications of or with any Government Agency.
“Intellectual Property”	means trademarks, trade names, patent rights, copyrights, computer software, domain names, licenses, trade secrets, inventions, technology, know-how and other intellectual property and similar rights.
“Jet Brilliant Beijing”	means Beijing Jet Brilliant Advertising Co., Ltd., a company incorporated under the PRC Laws.
“Jet Brilliant Hong Kong”	means Jet Brilliant Limited, a company incorporated under the laws of Hong Kong and of which 100% equity interest is directly owned by the Company.
“Jiaheyi”	means Jiaheyi Advertising (Beijing) Co., Ltd., a company incorporated under the PRC Laws.

“Material Adverse Effect”	means any event, circumstance, condition, occurrence or situation or any combination of the foregoing that has or could be reasonably expected to have a material and adverse effect upon the conditions (financial or otherwise), business, properties or results of operations or prospects of the Group Companies taken as a whole.
“PRC Laws”	means any and all laws, regulations, statutes, rules, decrees, notices, and supreme court’s judicial interpretations currently in force and publicly available in the PRC as of the date hereof.
“PRC Companies”	means the PRC Wholly Owned Subsidiaries, 1Verge Information and Jiaheyi.
“PRC Individuals”	means all individual shareholders of 1Verge Information and Jiaheyi who are PRC residents.
“PRC Wholly Owned Subsidiaries”	mean 1Verge Internet and Jet Brilliant Beijing.
“Prospectus”	means the prospectus, including all amendments or supplements thereto, that forms part of the Registration Statement.
“Renminbi”	means the lawful currency of the PRC.
“SAFE”	means the State Administration of Foreign Exchange of the PRC.
“SAFE Rules”	means the Notice on Issues Relating to the Administration of Foreign Exchange in Fund-Raising and Round-trip Investment Activities of Domestic Residents Conducted via Offshore Special Purpose Companies, promulgated by the State Administration of Foreign Exchange of the PRC on October 21, 2005, and the Notice of the General Affairs Department of the State Administration of Foreign Exchange on Printing and Distributing the Implementing Rules for the Notice on Issues Relating to the Administration of Foreign Exchange in Fund-Raising and Round-trip Investment Activities of Domestic Residents Conducted via Offshore Special Purpose Companies, promulgated by the State Administration of Foreign Exchange of the PRC on May 29, 2007.

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“U.S. dollars” means the lawful currency of the United States of America.

II. Opinions

(i) Each of the PRC Wholly Owned Subsidiaries has been duly incorporated and is validly existing as a foreign invested enterprise with limited liability and legal person status under the PRC Laws. Each of the PRC Companies other than the PRC Wholly Owned Subsidiaries has been duly incorporated and is validly existing as a PRC domestic company with limited liability and legal person status under the PRC Laws;

(ii) The articles of association and business license of each of the PRC Companies comply with the requirements of the PRC Laws and are in full force and effect. Except for any contemplated or ongoing applications for additional Governmental Authorizations as disclosed in the Prospectus and to the best of our knowledge after due and reasonable inquiries, the business carried out by each PRC Company complies with its articles of association in effect and is within the business scope descried in its current business license;

(iii) All of the equity interests in each of the PRC Companies have been duly authorized and all of the registered capital of each of the PRC Companies has been fully and timely paid in accordance with PRC Laws, except that 85% of the registered capital of Jet Brilliant Beijing is not due and therefore unpaid as of the date hereof. Each of the PRC Companies has duly obtained all Governmental Authorizations that are required under PRC Laws for the ownership interest by its respective shareholders as set out in Schedule 1 hereto of its equity interests. All of the equity interests of each of the PRC Companies are legally owned directly by the entities or individuals in the percentages as set out in Schedule 1 hereto after the respective names of the PRC Companies. To the best of our knowledge after due and reasonable inquiries, except for the pledge and option on such equity interests disclosed in the Prospectus, all of the equity interests of each of the PRC Companies are free and clear of all liens, charges or any other encumbrances, equities or claims and there are no outstanding rights, warrants or options to acquire, or instruments convertible into or exchangeable for, nor any agreements or other obligations to issue or other rights to convert any obligation into, any equity interest in any of the PRC Companies;

(iv) To the best of our knowledge after due and reasonable inquiries, except for the Group Companies, the Company has no other subsidiaries and does not own or control, directly or indirectly, any equity or other ownership interest in any corporation, partnership, joint venture or any other person in the PRC, except for the minority investment in Trade Lead Investments Limited made by the Company;

(v) To the best of our knowledge after due and reasonable inquiries, except for Jiaheyi, none of the PRC Companies has taken any action nor have any steps been taken or legal or administrative proceedings been commenced or threatened for the winding up, dissolution, bankruptcy or liquidation, or for the appointment of a liquidation committee or similar officers in respect of the assets of any of the PRC Companies, or for the suspension, withdrawal, revocation or cancellation of any of the business licenses of the PRC Companies;

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(vi) Each of the PRC Companies has full legal right, power and authority (corporate and other) to own, use, lease and operate its assets and, except as disclosed in the Prospectus, to conduct its business in the manner presently conducted and as described in the Prospectus. Except as disclosed in the Prospectus, each of the PRC Companies has all necessary Governmental Authorizations to own, use, lease and operate its assets and to conduct its business in the manner presently conducted and as described in the Prospectus and such necessary Governmental Authorizations contain no materially burdensome restrictions or conditions not described in the Prospectus, except for those Governmental Authorizations the absence of or failure to obtain or maintain which would not result in a Material Adverse Effect. Except as disclosed in the Prospectus and to the best of our knowledge after due and reasonable inquiry, (i) each of the PRC Companies is in compliance with the provisions of such necessary Governmental Authorizations in all material respects, (ii) none of the PRC Companies has received any notification of proceedings relating to the modification, suspension or revocation of any such Governmental Authorizations, and (iii) no circumstances have arisen such that any of such Governmental Authorizations may be revoked, suspended, cancelled or withdrawn or (where relevant) cannot be renewed upon its expiration date, except, in each case above, any such incompliance, notification of proceedings, revocation, suspension, withdrawal, cancellation, withdrawal or failure to renew which would not result in a Material Adverse Effect;

(vii) To the best of our knowledge after due and reasonable inquiry and except as disclosed in the Prospectus, none of the PRC Companies is in breach or violation of or in default, as the case may be, under (i) its articles of association and business license, (ii) any obligation, indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness governed by the PRC Laws (nor has any event occurred which with notice, lapse of time, or both would result in any breach of, or constitute default under or give the holder of any indebtedness the right to require the repurchase, redemption or repayment of all or part of such indebtedness), (iii) the terms or provisions of any Control Agreement (as defined below), (iv) any other obligation, license, lease, contract or other agreement or instrument governed by the PRC Laws to which any of the PRC Companies is a party or by which any of them may be bound or affected, or (v) any PRC Laws, or any decree, judgment or order of any Government Agency or any court in the PRC applicable to any of the PRC Companies, except, in each case of (ii) to (v) above, for such breach or violation or default, as the case may be, that would not reasonably be expected to have, individually or in aggregate, a Material Adverse Effect;

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(viii) To the best of our knowledge after due and reasonable inquiries and except as disclosed in the Prospectus, the leasehold interests in connection with the real property and buildings located in the PRC and held under lease by any of the PRC Companies are fully protected by the terms of the relevant lease agreements, which are valid and binding under the PRC Laws in all material respects, with such exceptions as are not material and do not interfere with the use made of such real property and buildings by any of the PRC Companies in all material respects;

(ix) To the best of our knowledge and except as disclosed in the Prospectus, each PRC Company owns or has valid licenses in full force and effect or otherwise has the legal right to use all Intellectual Property currently employed by it in connection with the business currently operated by it and none of the PRC Companies possesses any other Intellectual Property, except insofar as would not, individually or in the aggregate, have a Material Adverse Effect. To the best of our knowledge after due and reasonable inquiry, and except as disclosed in the Prospectus, (i) there are no rights of third parties to any of the Intellectual Property owned by the PRC Companies; (ii) there is no pending action, suit, proceeding or claim by others challenging the PRC Companies’ rights to, or the violation of any of the terms of, any of their Intellectual Property; (iii) there is no pending action, suit, proceeding or claim by others challenging the validity, enforceability or scope of any the PRC Company’s Intellectual Property; (iv) there is no pending action, suit, proceeding or claim by others that any of the PRC Companies infringes, misappropriates or otherwise violates or conflicts with any Intellectual Property of others; except in each case covered by (i) to (iv) above such as would not, if determined adversely to any of the PRC Companies, individually or in the aggregate, have a Material Adverse Effect;

(x) The descriptions of the corporate structure of the PRC Companies and the Control Agreements (as defined below) set forth in “Corporate Structure” section of the Prospectus are true and accurate in all material respects. Insofar as PRC Laws are concerned, the corporate structure of the Company (including the shareholding structure of each of the PRC Companies) as described in the Prospectus does not violate, breach, contravene or conflict with any applicable PRC Laws;

(xi) Each of the agreements set forth in Schedule 2 hereto (the “Control Agreements”) has been duly authorized, executed and delivered by the PRC Companies and PRC Individuals who are parties thereto, and all Governmental Authorizations in respect of the Control Agreements to ensure the legality and enforceability in evidence of each of the Control Agreements in the PRC have been duly obtained, except as disclosed in the Prospectus; and each of the Group Companies has, to the extent applicable, taken all necessary corporate actions to authorize the performance thereof; each of the Group Companies or PRC Individuals has the power and capacity (corporate or otherwise) to enter into and to perform its/his/her obligations under such Control Agreements; each of the Control Agreements constitutes a legal, valid and binding obligation of the parties thereto, enforceable against such parties in accordance with its terms subject, as to enforceability, to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and does not violate any requirements of the PRC Laws. No further Governmental Authorizations are required under the PRC Laws in connection with the Control Agreements or the performance of the terms thereof except for the Governmental Authorizations in connection with (x) the trademark license and (y) the future transfer of the equity interest in 1Verge Information and/or Jiaheyi, as the case may be, as contemplated under the applicable Control Agreements;

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(xii) The execution and delivery by each of the PRC Companies and the PRC Individuals of, and the performance by each of the PRC Companies and the PRC Individuals of its/his/her obligations under, each of the Control Agreements to which it/he/she is a party and the consummation by each of the PRC Companies and the PRC Individuals of the transactions contemplated therein will not: (i) result in any violation of the business license, the articles of association of the PRC Companies, or Government Authorizations; (ii) result in any violation of any PRC Laws, except as disclosed in the Prospectus, or (iii) to the best of our knowledge after due and reasonable inquiry, result in a breach or violation of or constitute a default under arbitration award or judgment, order or decree of any court of the PRC having jurisdiction over the relevant PRC Companies, as the case may be, any agreement or instrument governed by the PRC Laws, to which any of them is expressed to be a party or which is binding on any of them or any of their assets, except where, in respect of (iii) above, such violation, breach or default which, individually or in the aggregate, would not have a Material Adverse Effect;

(xiii) To the best of our knowledge after due and reasonable inquiries and except as disclosed in the Prospectus, there are no current or pending legal, arbitration or governmental proceedings, regulatory or administrative inquiries or investigations, or other governmental decisions, rulings, orders, demands, or actions before any court, arbitration body or any Government Agencies in the PRC to which any of the Group Companies is a party or of which any property of the Group Companies is the subject, which, if determined adversely to any of the Group Companies, would individually or in the aggregate have a Material Adverse Effect;

(xiv) Except as disclosed in the Prospectus, (i) all dividends and other distributions declared and payable upon the equity interests in the PRC Wholly Owned Subsidiaries may under the current PRC Laws be paid to their respective shareholders in Renminbi that may be converted into U.S. dollars and freely transferred out of the PRC, provided that the remittance of such dividends outside the PRC complies with the procedures required by the relevant PRC Laws on foreign exchange (including the overseas investment registrations by the Company’s ultimate shareholders who are PRC residents, if applicable), and (ii) all such dividends and other distributions are not subject to any taxes or deductions in the PRC;

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(xv) To the best of our knowledge after due and reasonable inquiry, (i) all returns, reports or filings which ought to have been made in respect of the Group Companies for taxation purposes as required by the PRC Laws have been made and are not the subject of any dispute with any Governmental Agency; and (ii) none of the PRC Companies has been investigated, claimed or penalized for any material PRC tax incompliance which might be assessed against it or any penalty imposed in connection with any late payment of PRC taxes;

(xvi) The tax registration certificate of each of the PRC Companies issued by the competent Government Agencies complies with the requirements of PRC Laws in all material respects and are in full force and effect;

(xvii) The SAFE Rules require PRC residents and PRC corporate entities to register with local branches of SAFE in connection with their direct or indirect offshore investment activities. The SAFE Rules provide that PRC residents include both PRC citizens, meaning any individual who holds a PRC passport or resident identification card, and individuals who are non-PRC citizens but primarily reside in the PRC due to their economic ties to China. As disclosed in the Registration Statement, Mr. Victor Koo, the founder and chief executive officer of the Company and the PRC Individuals, Qiong Qin and Dele Liu, have not been requested to file the registration and amendments pursuant to the SAFE Rules with the competent local branch of the SAFE, for reasons as set forth below:

(1) both PRC Individuals are PRC citizens and have not conducted any direct or indirect offshore investment activities or held any shares, directly or indirectly in any of the Company or Jet Brilliant Hong Kong; therefore, these PRC resident shareholders are not required to file the registrations and amendments pursuant to the SAFE Rules;

(2) based on the inquiries with the competent local branch of SAFE by Mr. Koo, the founder of the Company, who is a permanent resident of Hong Kong: given the lack of any publicly-available implementing rules or official interpretations issued by the SAFE regarding the issue of whether the registration and amendment filing requirements under SAFE Rules should apply to non-PRC citizens, despite that Mr. Koo stays in mainland China for over 183 days per annum, he should not be deemed a PRC resident for purposes of filing the registration and amendments pursuant to the SAFE Rules, and any attempt to submit an application to such local SAFE branch with respect to the filing of registration for Mr. Koo’s investment and shareholdings in the Company will not be officially accepted or examined.

However, we cannot conclude that the SAFE or the local branch responsible for PRC Wholly Owned Subsidiaries’ foreign exchange registrations will not later alter their position on and interpretation of the applicability of SAFE Rules to Mr. Koo and/or the PRC Individuals. Further, we cannot assure that in the event that the registration procedures set forth in SAFE Rules become applicable to Mr. Koo and/or the PRC Individuals, all of these individuals can successfully make or update any applicable registration or obtain necessary approval required by SAFE Rules for reasons such as the relevant local SAFE branch declines to accept the applications;

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(xviii) Except as disclosed in the Prospectus and to the best of our knowledge, the application of the net proceeds to be received by the Company from the Offering described under the caption “Use of Proceeds” of the Prospectus, does not (i) contravene any PRC Laws, or the articles of association and business license of any PRC Companies, or (ii) contravene the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement, note, lease or other agreement or instrument governed by PRC Laws and binding upon any PRC Companies, or any judgment, order or decree of any Governmental Agency, except in (ii) such as would not, individually or in the aggregate, have a Material Adverse Effect;

(xix) The statements set forth in the Prospectus under the captions “Risk Factors,” “Corporate Structure,” “Management’s Discussion and Analysis of Financial, Condition and Results of Operations – Selected Statements of Operation Items – Taxation – PRC,” “Enforceability of Civil Liabilities,” “Business,” “Regulation,” “Related Party Transactions-Contractual Arrangements with 1Verge Information and Jiaheyi,” and “Taxation -PRC Taxation” in each case insofar as such statements purport to constitute summaries of the matters of PRC law, fairly reflect the matters purported to be summarized and are true and correct in all material respects;

(xx) On August 8, 2006, six PRC regulatory agencies, namely, the PRC Ministry of Commerce, the State Assets Supervision and Administration Commission, the State Administration for Taxation, the State Administration for Industry and Commerce, the China Securities Regulatory Commission (the “CSRC”), and the State Administration of Foreign Exchange, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rule”), which became effective on September 8, 2006. The M&A Rule purports, among other things to require offshore special purpose vehicles (“SPVs”) formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals, to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange. On September 21, 2006, pursuant to the M&A Rule and other PRC Laws and regulations, the CSRC, on its official website, promulgated relevant guidance with respect to the issues of listing and trading of PRC domestic enterprises’ securities on overseas stock exchanges, including a list of application materials with respect to the listing on overseas stock exchanges by SPVs. As disclosed in the Registration Statement, under current PRC Laws, neither CSRC approval nor any other Governmental Authorization is required in the context of the Offering, because (1) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like the Company’s under the Prospectus are subject to this regulation, and (2) given that 1Verge Information and 1Verge Internet were incorporated before September 8, 2006, the effective date of this regulation, and that no provision in this regulation clearly classified contractual arrangements as a type of transaction subject to its regulation, the Company is not required to submit an application to the CSRC for its approval of the listing and trading of its ADSs on NYSE;

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(xxi) None of the PRC Companies is entitled to any immunity from any legal proceedings or other legal process or from enforcement, execution or attachment in respect of their obligations in the transactions contemplated under any of the Control Agreements to which it is a party; each of the PRC Companies can sue and be sued in its own name under the PRC Laws;

(xxii) There are no reporting obligations to any Governmental Agency under PRC Laws on the holders of the Offered Securities who are not PRC residents by virtue only of holding such the Offered Securities; and

We hereby consent to the use of this opinion in, and its being filed as an exhibit to, the Registration Statement. In giving such consent, we do not thereby admit that we fall within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the regulations promulgated thereunder.

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SCHEDULE 1

List of PRC Companies and Their Shareholding Information

	Full Name	Abbreviation	Shareholder(s)	Shareholding Percentage(s)
1.	1Verge Internet Technology (Beijing) Co., Ltd.	1Verge Internet	Company		100	%
2.	Beijing Jet Brilliant Advertising Co., Ltd.	Jet Brilliant Beijing	Jet Brilliant Hong Kong		100	%
3.	1Verge Information Technology (Beijing) Co. Ltd.	1Verge Information	Qiong Qin Dele Liu		80 20	%  %
4.	Jiaheyi Advertising (Beijing) Co., Ltd.	Jiaheyi	Qiong Qin Dele Liu		80 20	%  %

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SCHEDULE 2

List of Control Agreements

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